Presenter:
Jeff Thurk
Paper: "Industrial Subsidies When There Is Learning-by-Doing," joint work with Pinelopi Goldberg, Reka Juhasz, and Nathaniel Lane
Abstract:
We estimate the impact of national industrial subsidies on semiconductor pricing. Using proprietary foundry pricing data, we estimate a structural model of demand and supply in the presence of learningby-doing in the manufacturing process. We find robust estimates of learning-by-doing across production technologies. We show that learning-by-doing acts as a fiscal multiplier, amplifying the impact of national subsidies. International competition for buyers, such as NVIDIA, mitigates the effectiveness of industrial subsidies. These results underscore the importance of coordinated industrial policies in promoting innovation and economic growth.