Industrial Policy, Macroeconomics, and Structural Change

February 01, 2020

Jose Antonio Ocampo


The main argument of this paper is that the key to rapid economic growth is the dynamic efficiency of economic structures, defined as their capacity to generate new waves of innovative activities. After reviewing the empirical literature that confirms this view, the paper argues that the dynamics of production structures may be visualized as the interaction between two basic forces: innovations (broadly defined) and the learning processes associated with them; and the complementarities, linkages or networks among firms and production sectors. The paper then analyzes the specific structural transformation challenges that natural resource-dependent economies face. It finally argues that industrial policies should be accompanied by appropriate macroeconomic and financial policies that should guarantee in particular a competitive and stable real exchange rate and long-term financing for innovative activities, with a crucial role for national development banks.

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