Did (Or Does) the United States Have a Competitiveness Crisis?

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Abstract
Much policymaking in the 1980s at the federal, state, and local levels tried to redress the U.S. competitiveness crisis. A guiding presumption was that there was a sudden and profound inability of the United States to compete in manufactured goods. However, there has been little systematic analysis of American competitive performance disaggregated for the entire manufacturing sector. Data analyzed here for the years 1970-1990 and for the 24 major two-and three-digit ISIC industries reveals that there was a competitiveness crisis in the 1980s, but it was not endemic to all industries. Market share, trade balance, and revealed comparative advantage indicators suggest the crisis was characterized by intensified competitive decline for the auto, textiles, and electronics, industries, and by competitive reversals for the electrical machinery and office and computing machine industries. While many other major American industries appear to be in competitive health, the cumulative effect of macroeconomic imbalances is likely to cause future competitive stress in the capital goods and high-technology sectors.

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