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The False Distinction Between Industrial and Economic Policy

Economists have struggled to define industrial policy in a rigorous manner, but the truth is that almost all economic policy requires the use of instruments that will directly or indirectly favor certain sectors or groups. The question, then, is not whether to use industrial policy, but rather how to do so transparently and well.

CAMBRIDGE – After being disparaged and disdained for decades, industrial policy is back on the global economic agenda. Perhaps the strongest evidence of industrial policy’s rehabilitation is a recent international conference on rethinking structural transformation, cosponsored by the International Monetary Fund and attended by some of the world’s most influential economists.