A seminal study by highly-respected economists a few years ago found that the “China Shock” reduced U.S. manufacturing employment by up to 1.5 million jobs between 1990 and 2007. Now, a report last month concludes that American jobs didn't disappear – they just moved to the services sector and to areas where human capital is very high. In other words, capitalism has been behaving exactly we should want it to – continually re-allocating capital to achieve maximum efficiency.
A fresh study by a team of academics (Nicholas Bloom, Kyle Handley, Andre Kurmann and Phillip Luck) has found in effect that the China Shock is more like the kind employed in heart treatment – it improved the way our system works.
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