A question came up on another blog about the changing structure of the US economy. The graph below quits just before the “great moderation” ended. What you are looking at is the changing share of selected sectors of the US economy in total value added. What is interesting and I do not think a coincidence is that manufacturing saw a 12% decrease or (50% of its original share) in VA, while FIRE (finance, insurance, real estate and BS) increased its share by 12% to 33% of total VA. The other interesting thing to note is that while 1980 would seem to be the switch point the trend was already cast in the die which fits with the stylised facts that we have about evolution of the financialization of the US economy.
The open question is what if anything is the link between the rise of Wall Street and the decline of main street?