๐ญ Industrial Policy โ Explained Simply
Industrial policy is about balancing short-term costs with long-term gains to build a stronger, more resilient economy.
๐น What does โintertemporal trade-offsโ mean?
It means governments may accept lower benefits today (like subsidies, protection, or investment costs) to achieve higher growth and competitiveness tomorrow.
๐น Why does the learning rate matter?
The faster an industry learns and improves, the quicker it becomes efficient and profitable.
๐ High learning rate โ short-term pain, long-term big gains
๐ข Low learning rate โ slow progress, weaker payoff over time
๐น Big picture:
Smart industrial policy focuses on sectors that can learn fast, scale quickly, and strengthen the economy over time.
๐ 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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