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Where’s the Wisconsin Manufacturing Output Renaissance?

Summary:
Employment in manufacturing may be estimated to be rising, but output seems to be trending sideways through 2nd quarter. Figure 1: Log real manufacturing output in Minnesota (blue) and in Wisconsin (red), normalized to 2011Q1=0. NBER defined recession dates shaded gray. Vertical dashed line at 2013Q1 indicates beginning of Wisconsin Manufacturing and Agriculture Credit (MAC). Source: BEA, accessed 12/3/2017, NBER, and author’s calculations. Note that the much touted Manufacturing and Agriculture Credit does not correlate with a resurgence in output. Real manufacturing output as of 2017Q2 is 3.4% below the level in 2012Q4, just before the MAC took effect.

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Employment in manufacturing may be estimated to be rising, but output seems to be trending sideways through 2nd quarter.

Where’s the Wisconsin Manufacturing Output Renaissance?
Figure 1: Log real manufacturing output in Minnesota (blue) and in Wisconsin (red), normalized to 2011Q1=0. NBER defined recession dates shaded gray. Vertical dashed line at 2013Q1 indicates beginning of Wisconsin Manufacturing and Agriculture Credit (MAC). Source: BEA, accessed 12/3/2017, NBER, and author’s calculations.

Note that the much touted Manufacturing and Agriculture Credit does not correlate with a resurgence in output. Real manufacturing output as of 2017Q2 is 3.4% below the level in 2012Q4, just before the MAC took effect.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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