VXUS - Why Reviving American Manufacturing Won't Cause High Inflation
- Since offshoring contributed to the long-term disinflationary trend, it would seem to make sense that reshoring would contribute to an inflationary trend.
- The "reshoring will lead to higher inflation" argument revolves around differences in labor costs, which are much higher in the US than in Asia, India, Mexico, and other manufacturing hubs.
- But due to cost-saving automation technologies, any shift toward reshoring would likely result in a boom in robots, not high-paying manufacturing jobs.
- Price-lowering and productivity-enhancing technologies will probably keep the long-term secular trend of disinflation intact.
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Why Reviving American Manufacturing Won't Cause High Inflation