Industrial Policy’s Rebirth Is Reshaping the Economy

Industrial policy is making a comeback in the West. The US, Europe and other governments have introduced new incentives to the private sector in hopes of bringing supply chains closer to home, boosting domestic industries, and building strategic advantages in key technologies such as semiconductors and EVs. But success is not guaranteed. Can governments pick winners and losers? Do the potential benefits of industrial spending, such as driving innovation and economic growth, outweigh the consequences of higher debt and interest rates?

This episode of The OUTThinking Investor gathered insights from three experts on economics and fiscal policy to help investors assess how industrial strategies will affect financial markets and the global economy. Our guests are Paul Romer, economics professor at Boston College and former Chief Economist at the World Bank; Simon Johnson, professor at MIT Sloan School of Management and co-author of Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity; and Katharine Neiss, Deputy Head of Global Economics and Chief European Economist at PGIM Fixed Income.