๐Ÿญ Industrial Policy โ€” Explained Simply

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Industrial policy is about balancing short-term costs with long-term gains to build a stronger, more resilient economy.

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๐Ÿ”น What does โ€œintertemporal trade-offsโ€ mean?

It means governments may accept lower benefits today (like subsidies, protection, or investment costs) to achieve higher growth and competitiveness tomorrow.

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๐Ÿ”น Why does the learning rate matter?

The faster an industry learns and improves, the quicker it becomes efficient and profitable.

๐Ÿ“ˆ High learning rate โ†’ short-term pain, long-term big gains

๐Ÿข Low learning rate โ†’ slow progress, weaker payoff over time

๐Ÿ”น Big picture:

Smart industrial policy focuses on sectors that can learn fast, scale quickly, and strengthen the economy over time.

๐Ÿ‘‰ In simple words:

Sacrificing a little growth now can be worth it if it builds industries that grow faster and stronger in the future.

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