Advanced Manufacturing Emerges at the Federal Level
Advanced Manufacturing Emerges at the Federal Level
This chapter looks at how the new policy focus on advanced manufacturing developed following the Great Recession. Barack Obama faced the Great Recession with a 10 percent unemployment rate. In particular, the auto industry had collapsed, smashing a large part of the manufacturing supplier sector. Government efforts to return to tolerable growth levels were relying almost exclusively on short-term stabilization policies. Neoclassical economists were at the helm, pressing their menu of fiscal and monetary plans to coax the price signals that could restore investment to nurture positive rates of growth. The problem was that these stabilization policies were limited in their ability to offset long-term underinvestment in the economic assets and factors that create the larger growth multipliers needed. For a significant period, this longer-term underinvestment had led to declining U.S. competitiveness and slower rates of growth. In other words, short-term stabilization was simply not enough; the problems were deeply structural and required a structural response.
Keywords: policy, advanced manufacturing, Great Recession, growth, stabilization policies, fiscal plans, monetary plans, investment, underinvestment
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