Industrial Policy

Analytical Essay # 3384

Business > Industries
Economics > Macro

Industrial Policy

A discussion on the industrial policy in the U.S. and the effect of governmental involvement on its economy.

1,080 words () | 4 sources | 2001 United States

Paper Summary:

This paper discusses the effect the industrial policy in the US has on its economy. The writer debates whether governmental involvement in the industrial policy is necessary and beneficial to the economy. The writer recognizes government's need to redirect resources to research and development of new technologies and regulate industries such as telecommunications and aviation.

From the Paper:

"Industry in United States has always had a funny feeling about industrial policy, yet it has been in some of the most comprehensive growth industries in the market. The US is currently in the process of rolling back this policy, whose main target was specific sectors with regard to infrastructure, whether they are telecommunications or utilities. However, due to the explosion of the information age, the United States Government felt the need to redirect these resources, and the result, so far, has been Advanced Technology Program (ATP) under the direction and control of Institute of Standards and Technology (NIST). And even though the program has had a great deal of success and has been most instrumental in the research and development of promising new technologies like fiber optics and fuel cell development, it is simply just another form of "corporate welfare" as described by Stephen Moore, Director of fiscal policy studies for the Cato institute.[i] However, there is good justification to still experiment with this kind of industrial policy because of the degree of success that they have had in the US as well as its limited success in Japan and Germany during the1980s and 90s.[ii] Even though the ATP is a good compromise between regulating the industry and letting the market be the complete master of macroeconomic policy, there has got to be better ways of achieving the same results without the degree of corporate welfare."