Editor's note: This article was originally published on May 4, 2018, by Menzie Chinn here.
State level data for GDP in 2017Q4 were released today. This is an opportunity to update the progress of manufacturing value added (as opposed to employment) in Wisconsin after passage of the Manufacturing and Agriculture Credit (MAC).
Figure 1: Log real manufacturing output in Minnesota (blue) and in Wisconsin (red), normalized to 2013Q1=0. NBER defined recession dates shaded gray. Orange shading indicates phase in of Wisconsin Manufacturing and Agriculture Credit (MAC), with darkness of color indicating size of credit, in indicated percentages. Source: BEA, accessed 5/4/2018, NBER, and author's calculations.
Obviously, different things are happening in 2013Q1 when MAC was implemented; however, the fact that Minnesota manufacturing surges while US manufacturing continues to grow as Wisconsin dives is suggestive. As of 2017Q4, Wisconsin manufacturing value added is 1.2% below 2013Q1 levels, and 3.4% below the global peak in 2006Q4. In contrast, nationwide-level manufacturing value added has exceeded the pre-recession peak 4.7%.