2.6 — An Intellectual History of Trade IV: Increasing Returns & Industrial Policy — Class Content
Overview
Today, we continue looking at an intellectual history of trade, discussing more modern increasing returns arguments for industrial policy, extending into the present.
Readings
- Powell, 2004, “State Development Planning: Did it Create an East Asian Miracle?”
- Stiglitz, 2014, “Creating a Learning Society”
- Gangotena and Safner, 2023, “The Production of Increasing Returns: Physical Technology, Institutional Technology, and the Pitfalls of Production Functions”
John Oliver’s Last Week Tonight covers recent trade policies (in 2018) of the Trump administration, the brainchild of economist Peter Navarro. Some of it has been carried into the Biden administration.
Optional Readings
- Krugman, 1993, “What Do Undergrads Need to Know About Trade?”
- Safner, 2013, “City-State on a Hill: The Institutional History Behind the Paradox of Modern Singapore”
Much of my intellectual history series of lectures comes from Chapters 5-9 of Douglas Irwin’s1 excellent book:
Questions To Help Your Reading
- What is the role of the State in promoting development?
- How do we identify which industries might be worth protecting via industrial policy?
- What are the supposed successes of industrial policy (e.g. Singapore, Korea, Japan, Hong Kong) and how/why were they successful?
- What are the politics of the infant industry argument?
- What should our trade policy be, and what should we tell other poor countries to do, if they want rapid growth?
Slides
Below, you can find the slides in two formats. Clicking the image will bring you to the html version of the slides in a new tab. The lower button will allow you to download a PDF version of the slides.
You can type h to see a special list of viewing options, and type o for an outline view of all the slides.
I suggest printing the slides beforehand and using them to take additional notes in class (not everything is in the slides)!
Footnotes
One of the best economic historians on trade.↩︎