Technological Change and Industrial Policy

• In Event: International Political Economy of Technological Change

Abstract

How does trade policy respond to the invention of new technologies in the global economy? On the one hand, new technologies create demands for industrial policy, which aims to develop domestic manufacturing capacity in the new industry. On the other hand, domestic losers from the new industries create demands for `Luddite' policies restricting the imports of the new industry. These competing pressures create different predictions for trade policy, which I study in the context of the first era of globalization. To overcome the lack of data on trade policy before 1960, I digitized archived issues of trade journals that detailed changes in commercial policies worldwide. I construct a country-product level dataset of trade policy restrictions and use it to study trade policies dealing with innovations ranging from synthetic materials to railroads.

Author

• Zuhad Hai, New York University