While it is well known that free trade promotes prosperity for all, as Krugman explained in his book, a less known theory and yet by far the strongest case for protectionism is the infant industry argument. That is, a new industry with high potential but lacks economies of scales must require temporary protection from international competitors until they become mature as well, able to compete with already matured industries. This article critically examines the theory and reviews the empirical evidence. The majority of the studies indicate that the infant industry policy does not work.
Wow what an article comparable to Mises on protectionism in the sheer quality! so many references for my Uni professor hahaha! Would be interested to know your opinion on the EURO and the constant struggles the Eurozone has been having in regards to GDP growth, Wages Growth, Fall in Aggregate Endowment amongst other problems!
Yet again have to say how great the article is!
Thanks for article! Here other evidence on fail of IP in Japan, writed by mainstream economist. Even Paul Krugman argued, that IP fail. https://www.forbes.com/sites/mwakatabe/2017/03/20/nobel-laureate-stiglitz-is-right-on-japans-fiscal-policy-but-wrong-on-its-industrial-policy/?sh=75813037d16b