2019, nearly 40 percent of its workforce. as seen in michigan, this meant difficult transitions for industrial workers and their families as the economy shifted toward services and substituted imports for domestic production. yet, at - 5the same time, output as measured by the federal reserve ’ s industrial production index continued to climb. since the mid - 2010s, though, this relationship has reversed, and manufacturing productivity has been noticeably lower than that of the overall economy. what explains the anemic growth in recent years? for one thing, it equipment manufacturing has moved offshore, taking the productivity gains from progressively smaller and faster computer chips with it. 3 more generally, offshore locations have focused on production of high - volume goods. many of the remaining u. s. plants produce more specialized products, which tend to require more specialized labor and have lower productivity growth. 4 the motor vehicle industry has mostly defied this trend of offshoring final production. the u. s. motor vehicle industry still produces more than 10 million vehicles a year and employs 1 million people at assembly plants, labs, and suppliers. furthermore, it is an extremely innovative industry, and fierce competition forces automakers to roll out innovations quickly. dozens of motor vehicle research and development labs reside in michigan alone, churning out ideas for vehicle safety, fuel efficiency, comfort, and style. and with each passing year, cars and trucks look more like computers on wheels. in 1975, gordon moore predicted that the number of transistors found on integrated circuits ( semiconductors ) would double every two years. the accuracy of this prediction, known as moore ’ s law, is used as a barometer of the pace of technical advance in the electronics industry. mismeasurement could also be a contributor to the lackluster productivity gains in manufacturing. see susan houseman, christopher kurz, paul lengermann, and benjamin mandel ( 2011 ), “ offshoring bias in u. s. manufacturing, ” journal of economic perspectives, vol. 25 ( spring ), pp. 111 – 32 ; david m. byrne, john g. fernald, and marshall b. reinsdorf ( 2016 ), “ does the united states have a productivity slowdown or a measurement problem? ” finance and economics discussion series 2016 - 017 ( washington : board of governors of the federal reserve system, march ), http : / / dx. doi. org / 10. 17016 / feds. 2016. 017. - 6lo

level. in addition to accommodating the heightened demand for reserves, the federal reserve took several steps to facilitate market functioning in the wake of the september 11 attacks. for example, the hours of the funds and securities transfer systems for u. s. government and agency securities operated by the federal reserve were significantly extended during the week after the attacks. from september 11 through the 21st, the federal reserve reduced or eliminated the penalty charged on overnight overdrafts, largely because those overdrafts were almost entirely the result of extraordinary developments beyond the control of the account holders. for four weeks after the attacks, the federal reserve bank of new york liberalized the terms under which it would lend securities from the system portfolio, and the amount of securities lent rose to record levels in the second half of september. the federal reserve working with the national communications system ( ncs ) also assisted market participants in restoring their telecommunications services. the markets and financial market authorities worked hard to restore operations, and market activity resumed relatively quickly after the attacks. by the week following september 11, the financial system had largely begun to function normally, although activities to address the aftermath of the attacks continued for some time. steps taken since september 11 to protect the financial infrastructure within weeks of september 11, we initiated a self - assessment of our contingency arrangements across the federal reserve and embarked on forty initiatives, which we classified under five broad headings : • ensure continuity of federal reserve operations. • ensure market liquidity during a crisis. • ensure effective communications and coordination during a crisis. • improve resilience of the private - sector financial system infrastructure. • improve resilience of the telecommunications infrastructure supporting critical financial services. some of the key steps the federal reserve has taken to improve our infrastructure and the delivery of critical central - bank and financial services include the following : • we have developed plans to ensure that critical central - bank activities, supervisory functions, and financial services operations have sufficient redundancy in facilities and staff. we have enhanced and tested business - continuity arrangements for critical functions and business lines. • our facilities for providing critical financial services are backed up at fully operational, geographically diverse sites to ensure a speedy recovery even if the critical infrastructure is disrupted across multistate areas. • we have enhanced our resiliency for discount window lending and cash services provided by the reserve banks. • we have improved our tools and authority to provide liquidity in a crisis. in 2003, the board established the primary credit program,