How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the...

Since the 18th century, policymakers have debated the merits of industrial policy (IP). Yet, economists lack basic facts about its use due to measurement challenges. We propose a new approach to IP measurement based on information contained in policy text. We show how off-the-shelf supervised...

We analyze a model of green technological transition along a supply chain. The model generates a unique equilibrium for given initial conditions but multiple steady-states. We show that: (i) even in the presence of Pigouvian environmental taxation, targeted sectoral subsidies are generally...

Renewable electricity generation technology costs have fallen dramatically, investment has grown rapidly, and renewables are now a pillar of climate and decarbonization policy. Part of the credit for these trends goes to environmental policy efforts to support renewable energy as a substitute to...

We decode China's industrial policies from 2000 to 2022 by employing large language models (LLMs) to extract and analyze rich information from a comprehensive dataset of 3 million documents issued by central, provincial, and municipal governments. Through careful prompt engineering, multistage...

Trade and industrial policies, while primarily intended to support domestic industries, may unintentionally stimulate technological progress abroad. We document this mechanism in the case of rare earth elements (REEs) - critical inputs for manufacturing at the knowledge frontier, with low...

This paper takes a retrospective look at the U.S. government's effort to rescue and restructure General Motors and Chrysler in the midst of the 2009 economic and financial crisis. The paper describes how two of the largest industrial companies in the world came to seek a bailout from the U.S....

Industrial policies (IPs) include such varying practices as production subsidies, export subsidies, and import protection, and are commonly used by countries to promote targeted sectors. However, such policies can have significant impacts on sectors other than those targeted by the IPs,...

Using a comprehensive dataset of all medium and large enterprises in China between 1998 and 2007, we show that industrial policies allocated to competitive sectors or that foster competition in a sector increase productivity growth. We measure competition using the Lerner Index and include as...