1/7 Amy Kapczynski argues that "everywhere you look in Washington...
Michael Pettis@michaelxpettis
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Sep 26, 2024
~1 min read
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Amy Kapczynski argues that "everywhere you look in Washington today, there are signs that industrial policy is back. The presidential election is a fight not over whether we will have industrial policy, but over what kind we should have."
democracyjournal.org/arguments/indu…
Amy Kapczynski argues that "everywhere you look in Washington today, there are signs that industrial policy is back. The presidential election is a fight not over whether we will have industrial policy, but over what kind we should have."
democracyjournal.org/arguments/indu…
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I would put it a little differently. Industrial policy has been especially powerful in driving the US economy in recent decades, but this industrial policy was mostly designed abroad. What's new is that the US is determined to regain control over how this policy is designed.
I would put it a little differently. Industrial policy has been especially powerful in driving the US economy in recent decades, but this industrial policy was mostly designed abroad. What's new is that the US is determined to regain control over how this policy is designed.
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In a globalized world, changes in one country's trade and capital accounts must be automatically accommodated by opposite changes in the trade and capital accounts of its trade partners. That's because globally, external accounts must balance.
In a globalized world, changes in one country's trade and capital accounts must be automatically accommodated by opposite changes in the trade and capital accounts of its trade partners. That's because globally, external accounts must balance.
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And because every country's external account must balance its internal account, this effectively means that industrial and trade policies in one country must be absorbed by its trade partners in the form of equivalent but opposite "industrial policy".
And because every country's external account must balance its internal account, this effectively means that industrial and trade policies in one country must be absorbed by its trade partners in the form of equivalent but opposite "industrial policy".
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For example if one country successfully implements policies designed to expand its share of global manufacturing, or its share of global battery production, by definition those policies must work on...
For example if one country successfully implements policies designed to expand its share of global manufacturing, or its share of global battery production, by definition those policies must work on...
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its trade partners in ways that reduce their shares of global manufacturing or of battery production. They may not have wanted an industrial policy designed to do this, but that is exactly what they will get. Global demand, after all, must balance global supply.
its trade partners in ways that reduce their shares of global manufacturing or of battery production. They may not have wanted an industrial policy designed to do this, but that is exactly what they will get. Global demand, after all, must balance global supply.
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That's why I've long argued that the real discussion in Washington shouldn't be about whether or not industrial policy is good for the economy, but rather whether US industrial policy should be designed at home or abroad.
carnegieendowment.org/china-financia…
That's why I've long argued that the real discussion in Washington shouldn't be about whether or not industrial policy is good for the economy, but rather whether US industrial policy should be designed at home or abroad.
carnegieendowment.org/china-financia…
