Prompt Cast
The Resurgence of Industrial Policy in the United States
TLDR Industrial policy, once controversial, is now embraced by the US with significant investments in sectors like microchip manufacturing and clean energy. This policy aims to correct market failures, change the economy towards long-term goals, and learn from both successes and failures.
Timestamped Summary
00:00
Industrial policy, a once controversial idea in economics, is now being embraced by countries like the United States, with President Biden leading a significant investment in sectors like microchip manufacturing and clean energy.
03:51
Industrial policy involves the government making targeted decisions to change the composition of the economy towards specific long-term goals, such as transitioning to a renewable energy economy.
07:29
Industrial policy aims to correct market failures, such as positive externalities and coordination failures, by allowing the government to intervene in the economy.
10:49
Industrial policy has been debated with contrasting examples from East Asia's growth miracle to Latin America's more modest results, leading researchers to seek real answers on its effectiveness.
14:18
Studying France during the time of Napoleon reveals that trade protectionism as a form of industrial policy can lead to long-term success in certain industries.
18:09
Industrial policy has seen a resurgence in the United States under the Biden administration, with significant investments in areas like R&D, microchip manufacturing, and green energy.
21:50
The Biden administration is addressing market failures in green energy through industrial policy, facing criticism for potentially propping up politically important industries and the challenge of picking winners and losers in government investments.
25:37
Industrial policy should be viewed similarly to venture capital, with an acceptance of risks and failures, focusing on learning from both successes and failures for the benefit of the economy.
