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Short and to the point. I've been passing this post around... it helps dealing with the raising FX rate at the psychological level. Of course, this implies you have a long enough horizon to appreciate the impact for real wages... I don't think it'll the auto workers that much.

Still, I wonder how much of the raise of the Capital-Labour ratio is due to higher capital stock, and how much is due to lower employment level in this sector? Is there a decomposition readily available?
It'll get us a better picture of the manufacturer's decision. How much is increasing labour intensity, and how important is this reduction in the price of machinery for output.

Between 2002 and 2005, hours worked in the manufacturing sector went down by 3.4%, and the capital stock increased by 1.8%. If you look at just machinery and equipment (the stuff that should most closely reflect the implementation of new techologies), the increase is 6.9%.

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