If the dollar’s value were fixed in terms of another currency or basket of currencies, the Fed would be constrained to set its policy rate at a level consistent with rates in global capital markets.
In 1980, for instance, the share of manufacturing in real economic activity was 11.8%, while the sector employed approximately 15,000 persons. Part of the reason for the secular decline may be related to the fact that the country has indeed become a service-based economy.