Oya Celasun, Gabriel Di Bella, Tim Mahedy, and Chris Papageorgiou
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
February 2014
DOI:
http://dx.doi.org/10.5089/9781484301821.001
ISBN:
9781484301821
ISSN:
1018-5941
Page:
24
The notable rebound of U.S. manufacturing activity following the Great Recession has raised the question of whether the sector might be experiencing a renaissance. Using panel regressions, we find that a depreciating real exchange rate, an increasing spread in natural gas prices between the United States and other G-7 countries, and in particular decreasing unit labor costs have had a positive impact on U.S. manufacturing production. While we find it unlikely for manufacturing to become a main engine of growth in the United States, we find that U.S. manufacturing exports could provide nonnegligible growth opportunities going forward.
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