"Econ 102" with Noah Smith and Erik Torenberg cover image

International Development, The Reserve Currency, and Xi Jinping’s Legacy

"Econ 102" with Noah Smith and Erik Torenberg

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Embrace FDI for Sustainable Growth

Foreign direct investment (FDI) is increasingly recognized as a critical development strategy, shifting perspective from its historical view as inferior. While concerns existed that multinational companies would dominate local markets and hinder domestic brands, evidence from various countries illustrates a potential for FDI to drive significant economic advancement. Thailand's stagnant progress beyond middle income exemplifies the pitfalls of an FDI-heavy model without further innovation. In contrast, countries like Poland, Malaysia, China, and Taiwan successfully leveraged FDI to transition from middle to upper income levels, demonstrating the importance of strategic FDI in fostering sustainable economic growth.

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