Found 5 article(s) for author 'Industrial Policy'

Smart Development Banks

Smart Development Banks. Ricardo Hausmann, 2019, Paper, “The conventional paradigm about development banks is that these institutions exist to target well-identified market failures. However, market failures are not directly observable and can only be ascertained with a suitable learning process. Hence, the question is how do the policymakers know what activities should be promoted, how do they learn about the obstacles to the creation of new activities? Rather than assuming that the government has arrived at the right list of market failures and uses development banks to close some well-identified market gaps, we suggest that development banks can be in charge of identifying these market failures through their loan-screening and lending activities to guide their operations and provide critical inputs for the design of productive development policies. In fact, they can also identify government failures that stand in the way of development and call for needed public inputs. This intelligence role of development banks is similar to the role that modern theories of financial intermediation assign to banks as institutions with a comparative advantage in producing and processing information. However, while private banks focus on information on private returns, development banks would potentially produce and organize information about social returns.Link

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Industrial Policy: Love it or Hate it?

Industrial Policy: Love it or Hate it? Lant Pritchett, Ricardo Hausmann, February 28, 2018, Video, “Industrial policy has been one of the most heated issues in the history of development. It was viewed as a tool to stimulate activity, but debating what and how to incentivize is the wrong question. Ricardo Hausmann says the new industrial policy is an information revelation process about the state of possibilities, the nature of the obstacles and figuring out whether you can sort out the obstacles so that these new activities can take over.Link

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Trump’s Defective Industrial Policy

Trump’s Defective Industrial Policy. Dani Rodrik, January 10, 2017, Opinion, “US President-elect Donald Trump has yet to take office, but his brand of flawed industrial policy has been on full display since his surprise win in November. Within weeks of the election, Trump had already claimed a victory. Through a mix of inducements and intimidation, he prevailed on the heating and cooling firm Carrier to keep some of its operations in Indiana, “saving” around 1,000 American jobs. Touring the Carrier plant subsequently, he warned other US firms that he would impose stiff tariffs on them if they moved plants overseas and shipped products back home.Link

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What Do We Learn From Schumpeterian Growth Theory?

What Do We Learn From Schumpeterian Growth Theory. Philippe Aghion, February 15, 2013, Paper. “Schumpeterian growth theory has “operationalized” Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process which could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) rm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; (iv) the emergence and impact of long-term…”  Link

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Innovation, Reallocation and Growth

Innovation, Reallocation and Growth. William R. Kerr, 2013, Paper. “We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates…” Link

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