Miracle, or marginal gain?

Industrial policy is said to have sparked huge growth in East Asia. MIT economists Arnaud Costinot and Dave Donaldson say the numbers tell a more complex story. “In most cases, the gains are not going to be enormous,” Costinot says. “The question is whether the textbook argument for industrial policy fully explains those successes, and our punchline would be, no, we don’t think it can,” Donaldson continues.