Industrial policy is back – should we welcome government intervention? | Barry Eichengreen

Joe Biden's Inflation Reduction Act spurred similar efforts worldwide, but care must be taken when targeting subsidies

Industrial policy is back. It is back with a vengeance in the US, where for decades the dominant ideology and policy minimised government efforts to influence the structure of the economy. Now, in contrast, we have the Infrastructure Investment and Jobs Act, the Chips and Science Act, and the Inflation Reduction Act, all with significant industrial policy components.

And what happens in the US doesn't stay in the US. Other countries, similarly seeking to preserve and enhance their industrial bases, have responded with comparable measures. The question is whether the return of such government-led efforts should be welcomed.