Microeconomic Foundations: Innovation, Productivity and Competitiveness

Abstract

How do US firms and workers stack up against their foreign counterparts? Is US prosperity under siege from ever cheaper imports and production off-shoring? Does the US retain its edge in innovation? Or, if no longer Japan, is China, India or Korea poised “to eat our lunch?” In recent decades, the accelerated pace of globalization and technological change has transformed the US workplace. Concern over how to cope has focused the political dialogue on enhancing international “competitiveness.” But what does it mean for a country, as opposed to a particular firm or individual worker, to grow more or less competitive? And what are the implications for US hegemony?