Pinelopi Goldberg on Industrial Policy in the Global Economy

Video & Timestamps

On Thursday, May 8, Pinelopi Goldberg joined Markus’ Academy for a conversation on “Industrial Policy in the Global Economy.” Goldberg is the William Nordhaus Professor of Economics and Global Affairs and an Affiliate of the Economic Growth Center at Yale University.

Watch the full presentation below. You can watch all Markus’ Academy webinars on the Markus’ Academy YouTube channel.

Timestamps:

[0:00] Markus’ introduction

[5:09] How should international economists think about industrial policy?

[17:08] Four case studies: insights and measurement challenges

[41:43] Cross-border spillovers of industrial subsidies

[1:07:03] Industrial policy for developing countries

Executive Summary

• A summary in three bullets
  • Economists have traditionally been skeptical of industrial policy (IP), but attitudes have shifted recently for several reasons, including the presence of market failures (e.g. climate change), political economy considerations (e.g. concern for domestic producers and workers), and dynamic externalities (e.g. learning-by-doing in technologically innovative sectors)
  • In mature sectors like shipbuilding, IP mainly steals market share, while in newer sectors like EVs, semiconductors, and renewables, it can promote learning and global spillovers—sometimes turning national IPs into global complements
  • Domestic content rules and home bias, however, dampen these benefits. In sectors like semiconductors industrial policy has only succeeded when paired with access to foreign frontier technology. Export controls appear effective
• Click here for the full summary