AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
The Mysterious Disappearance of Productivity Growth in US Manufacturing: Was It the China Shock?
AEA Papers and Proceedings
(pp. 452–456)
Abstract
After registering a 3 percent annual rate from 1948 to 2010, the growth of labor productivity in US manufacturing since 2010 has come to a cold stop, with a zero 2010–2025 annual growth rate. What caused the disappearance of productivity growth in the core of the US economy? We point to the channels by which an invasion of imports, led by China in the 2000–2010 decade, eroded the competitiveness of US producers. Imports competed away sales, closed plants, cut capacity utilization, slashed profits and investment, postponed installation of modern technology, and diverted resources from R&D and innovation.Citation
Gordon, Robert J., and Kenneth Ryu. 2026. "The Mysterious Disappearance of Productivity Growth in US Manufacturing: Was It the China Shock?" AEA Papers and Proceedings 116: 452–456. DOI: 10.1257/pandp.20261041Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E31 Price Level; Inflation; Deflation
- F14 Empirical Studies of Trade
- L24 Contracting Out; Joint Ventures; Technology Licensing
- L25 Firm Performance: Size, Diversification, and Scope
- L60 Industry Studies: Manufacturing: General
- P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid