US Service Economy
The cluster discusses the US economy's dominance by services (70-80% of GDP), including finance, real estate, and information services, versus manufacturing, debating its productivity, value, and sustainability compared to production-based economies.
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This seems like it's a natural result of the US economy being concentrated in the finance, insurance and real estate sectors, i.e just shuffling money around rather than production.
Didn't US economy mostly switch to services?
Isn't this essentially the defintion of a service economy ?
No, most of the US economy is service and office based. http://www.bls.gov/news.release/pdf/ocwage.pdf (see chart 3)
>there is more to an economy than manufacturing.Not really. Most developed economies are basically 70% Baumol's cost disease[1]. The 20% of the American GDP that goes to healthcare, half of the military budget that goes into salaries, public services, the police isn't billed on productivity. Those are non-tradeable services whose compensation inflates with growth in the productivity gaining sectors of the economy.That's why you can go not to a wealthy Tier 1 city in China
Services are 77% of US GDP, and you cannot "hoard" services.
On point 1) you're incorrect. Services make up nearly 80% of the U.S. economy. Our economic growth in recent decades has not been due to an increase of stuff.https://2016.trade.gov/publications/ita-newsletter/1010/serv...I work for a multi-billion dollar company and we just sell ones and zeroes.
FYI The United States economy is 79.6% services:http://en.wikipedia.org/wiki/Economy_of_the_United_States
Why is a service economy "icky"?
Is this because of the transition to a service economy?