Write a 5-7 page paper (double spaced, 12 point font, standard margins) on the topic below. Your title page and bibliography (and any other pages that are not writing) do not count towards the page co

Write a 5-7 page paper (double spaced, 12 point font, standard margins) on the topic below. Your title page and bibliography (and any other pages that are not writing) do not count towards the page co
State’s role in Economic Policy How the state influences the market as a whole. Typically, in neoclassical economics, the state is seen as an inhibitor of economic growth, since the state puts policies in place encompassing the market, and then leaves the market to itself. On the other hand, in a worst-case scenario, the state can halt the progress of markets by actively intervening.  Free Trade vs. Protectionism The idea of leaving the market open to foreign imports and domestic exports, without any restrictions, vs. the idea of preventing foreign goods from competing with domestic goods in the same market. Laissez-faire An economy where trade is permitted without any government intervention. The neoclassical view states that this is typically the best case for economic growth, however this is not necessarily the case for poor countries. Industrial Policy Policies where the state intervenes in an economy to encourage growth. For example, free trade protectionism. Traditionally, this is seen as a bad thing, but according to economist Ha-Joon Chang, industrial policy was a necessary step for rich countries to accumulate wealth. Historical Narratives of Free Trade Protectionism Free Trade Protectionism: economic policies that prevent foreign goods from competing in a domestic market. Example: British Calico Acts of 1700 & 1721, where Britain banned the sale of foreign textile imports (mainly targeting India) in order to increase domestic demand. “Kicking away the ladder” The idea coined by Ha-Joon Chang that, despite developed countries exclaiming the greatness of free trade, historically they did not utilize free trade to accumulate wealth. In his book “Kicking Away the Ladder”, Chang argues that free trade is good for rich countries and bad for poor countries. South Korea’s State-Led Industrialization – Monday February 6th  First Industrial Revolution Industrial Revolution of Invention (18th – 19th century). Britain was the first to reach industrialization with the discovery of new forms of energy.  Second Industrial Revolution The United States, Japan, and Germany were next to reach this point (19th – 20th century). Because innovation and invention had already happened, these countries were able to jump to the technology frontier without trial and error. Third Industria Revolution Up-and-coming, ascendant countries (primarily agricultural societies) took a different approach to industrialization. Instead of talking about invention and innovation, thye focused on industrialization by learning, such as borrowed technology.  Land Reform Land distribution created higher outputs of agricultural farming as well as a more equal distribution of wealth and income. The land reform creates equally modest incomes which allows for higher consumption  Chaebol Huge hierarchical firms, often tied to a family, that branch out and go to different markets (lots of different industries) Eg. Yamaha, Samsung Subsidy vs Tariff Tariffs Taxes on imported goods that protect industrialization by making competitors goods more expensive  Subsidies Government subsidizes smaller, local industries so that they can still compete Subsidies as Discipline “In exchange for subsidies, the state imposed performance standards on private firms” Middle Income Trap  Development with the purpose of raising incomes; however, workers will want their income to be raised, which cuts into the reasons for competing (lower wages attract production)