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Does the U.S. Economy Compete with Other Economies?

October 22, 2012
| Blogs & Op-eds

f a country loses the computer chip industry to foreign competitors, that value similarly disappears as the industry’s supply chains and industrial commons are hollowed out. The neoclassical assumption that residual assets will be redeployed to high-value-added sectors is not necessarily the case. More likely than not, many of the laid-off computer chip workers would end up working in lower-paying sectors, perhaps making potato chips. The United States economy does compete with other nations for high value-added production and losing the race means a stagnant economy, with limited wage growth and higher unemployment rates. Just what America is facing today.