The writer is Elihu professor of economics at Yale University, former chief economist of the World Bank and author of ‘The Unequal Effects of Globalization’
Economic policy today seeks to address a dizzying array of challenges — to stem inflation, shore up supply chains, and create jobs while also spurring innovation, fighting climate change, bolstering national security, and preparing for a range of future crises and shocks.
In the US, the emerging toolbox for tackling these diverse issues centres on “industrial policy”, with two key components. The first is public investment to help make the economy greener and more inclusive. The second is a revival of a “Buy American” policy which includes funding provisions, as well as trade and immigration policies that favour US companies and workers and reduce the inflow of foreign goods and people across the border.