In response to a professor's statement that "everything relevant to economics was in the QJE at one point" (I'm misquoting), I will now be reading one academic economics paper, in entirety, every day. I make no promises about this lasting after classes start up, since I'll be doing predominately math courses.
Today's selection: Industrial Policy for the Twenty-First Century
Commentary: I remain skeptical of such plans, but I do accept this infant industry (or infant cluster) argument to be valid. The framework he proposes for subsidzing innovation and 'self-discovery' of potential improvements may well be useful.
I feel more confident proclaiming that one country or subset practicing this doctrine may be successful, but if everyone did it, would we be collectively better off? Well, that would be competition, no?
Supporting innovation is probably important. I'll concede that government does have a role in promoting technology/development. I have no doubt markets could do it, given time, but I like, in general, the idea.
The key in the successful implementation would be to keep money headed directly towards innovation and development, and strictly away from rent-seeking and consumption. Of course, much, much, much easier said than done. I remain skeptical of government's power to do anything correctly.