CRISES have a way of getting people to reassess tarnished ideas. The policy of fiscal stimulus languished in the intellec-tual wilderness until the financial meltdown of 2008-09 forced governments to start spending as a way of propping up aggregate demand. As rich countries struggle with an anaemic economic recovery, it is now the turn of industrial policy. The idea of gov-ernment intervention to influence the composition of a coun-try's output has long been derided by economists for breeding in-efficiency, reducing competition, encouraging lobbying and saddling countries with factories producing products nobody wants. But in the aftermath of the crisis, industrial policy has gathered some vocal champions.
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