We judged the performance of each industry according to two criteria: (1) an industry’s net employment change from March 2001 to November 2004, and (2) the change in an industry’s share of total employment between March 2001 and November 2004 compared with the change in employment shares exhibited over a pre-peak period of similar length.3 Table 1 ranks the performance of two-digit NAICS industries since March 2001 according to the first measure of underperformance.
Recently there has been considerable expansion in global liquidity but this should not dilute the vigil of policy makers in regard to volatility in capital flows. Very often, it is difficult to assess, ex ante, whether capital flows are temporary or permanent. It is prudent for policy makers to assume that they are reversible till they are proven to be enduring.