Search

Begin New Search Topic Inflation Publication Year within 1 Year

21. Is the United States undergoing a manufacturing renaissance that will boost the middle class?

Author:
Robert Z. Lawrence
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
President Joseph R. Biden Jr. made the goal of his economic policies to “build back better.” He emphasized helping workers without college degrees in order “to grow the economy from the bottom up and the middle out.” The emphasis on a manufacturing renaissance is reflected in the special incentives for US manufacturing in President Biden’s programs: the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act. Lawrence finds little evidence of a renaissance in US manufacturing as of July 2024: US manufacturing employment was barely above its pre-COVID levels. Manufacturing output has grown more slowly than GDP since the pandemic, and productivity in manufacturing has not increased since 2017. Moreover, the Bureau of Labor Statistics projects that over the next decade, manufacturing employment will decline and manufacturing output will grow more slowly than GDP. However, Lawrence says, additional manufacturing employment growth could be in the pipeline because of investment projects that have been announced but not yet completed. Lawrence estimates the additional manufacturing employment potential of announcements compiled by the White House as of mid-2024, finding that these projects could boost demand for 1.7 million manufacturing workers—a growth of 13.3 percent above 2022 manufacturing employment levels. It should be noted, however, that these are not estimates of net overall manufacturing employment growth. Some of the increased demand will be offset by losses of fossil fuel–related jobs displaced by the investments as well as declines in manufacturing employment for other reasons. Moreover, the impact of all the projects is just over 1 percent of overall US employment and in most states far too small to significantly change the opportunities for most non-college-educated workers and disadvantaged communities.
Topic:
Economic Policy, Inflation, Manufacturing, and Middle Class
Political Geography:
North America and United States of America

22. Spillover effects of the recent US monetary policy shocks on the South African economy: The role of monetary and fiscal policy coordination

Author:
Guangling Liu and Marrium Mustapher
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study examines how different policy mix regimes affect the impact of recent US contractionary monetary policy on South Africa’s inflation and business cycles. The study uses a small open economy New Keynesian Dynamic Stochastic General Equilibrium model with an integrated fiscal block to analyse these effects. Regime M (active monetary policy) is more effective at containing the spillover effects but leads to higher public debt, requiring larger future fiscal surpluses. The commitment to price stability under Regime M increases real interest rates, raising domestic debt service costs and the debt-to-GDP ratio. Regime F (active fiscal policy), in contrast, stabilizes debt more quickly but at the cost of higher inflation, as it does not use future surpluses to manage public debt. These spillover effects are more amplified under both Regime M and Regime F in the case of a complete exchange rate pass-through and a higher degree of trade openness, with Regime F exhibiting a stronger amplification effect.
Topic:
Foreign Policy, Economics, Monetary Policy, Inflation, and Fiscal Policy
Political Geography:
Africa, South Africa, North America, and United States of America