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This report explores the manufacturing job crisis in the United States between 1998 and 2003, focusing on the interplay of productivity, demand, and trade deficits in manufactures. It provides a comprehensive accounting framework, delves into the contributions of job loss from durable and non-durable sectors, and examines productivity growth trends. The analysis includes insights on trade deficits, the value of the dollar, and offers policy options such as dollar policy negotiations, legacy cost relief, and healthcare considerations.
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Policy options • 1) Dollar policy: continue negotiations with countries that peg their currency for competitive advantage • 2) Legacy cost relief for retiree health and pension benefits • 3) Health care, as always