Macro Roundup

Worth reading as your write, Krugman op-ed adapted from a chapter Krugman has in an upcoming PUP book"...Until the late 1990s, employment in manufacturing, although steadily falling as a share of total employment, had remained more or less flat in absolute terms. But manufacturing employment fell off a cliff after 2000, and this decline corresponded to a sharp increase in the non-oil deficit.Does the surge in the trade deficit explain the fall in employment? Yes, a lot of it. A reasonable estimate is that the deficit surge reduced the share of manufacturing in GDP by around 1.5 percentage points, or more than 10%, which means that it explains more than half the roughly 20% decline in manufacturing employment between 1997 and 2005. This is over a relatively short time period and focuses on absolute employment, not the employment share. Trade deficits explain only a small part of the long-term shift toward a service economy. But soaring imports did impose a shock on some U.S. workers, which may have helped cause the globalization backlash.....This is where the now-famous 2013 analysis of the “China shock” by David Autor, David Dorn and Gordon Hanson comes in. What they mainly did was shift focus from broad questions of global income distribution to the effects of rapid import growth on local labor markets, showing that these effects were large and persistent. This represented a new and important insight.To make partial excuses for those of us who failed to consider these issues 25 years ago, at the time we had no way to know that either the hyperglobalization that began in the 1990s or the trade-deficit surge a decade later were going to happen. And without the combination of these developments, the China shock would have been much smaller. Still, we missed a crucial part of the story...."Paul Krugman, "What Economists (Including Me) Got Wrong About Globalization," Bloomberg, October 10, 2019, https://www.bloomberg.com/opinion/articles/2019-10-10/inequality-globalization-and-the-missteps-of-1990s-economics

the Dottling/Gutierrez/Philippon you asked about (tracking investment using Q) not sure it's a better version of what we have

"...We analyze private fixed investment across European economies and in the US over the past 20 years, focusing on tangible and intangible investment and the role of competition and financial constraints. In both regions, we find that investment is weak, but we argue that the reasons are more cyclical in Europe and more structural in the US.In the US, we find that investment is lower than predicted by fundamentals starting around 2000, and that the gap is driven by industries where competition has decreased over time. The decline in US investment has coincided with increased concentration and decreased anti-trust enforcement. In Europe, on the other hand, investment is roughly in line with measures of profitability and Tobin’s 𝑄 for the majority countries, except at the peak of the crisis, most notably Spain and Italy.Unlike in the US, concentration has been stable or even declining in Europe, while product market regulation have decreased and anti-trust regulation has increased.Regarding intangible investment,we find that it accounts for some but not all of the weakness in measured investment. We also find that EU firms have been catching up with their US counterparts in intangible capital.The process of intangible deepening happens mostly within firms in Europe, as opposed to between firms in the US...."