Discussion Paper - No. 1949 October 2023 Industrial policy and the

The first are a set of policies that seek to protect domestic markets from foreign competition; the second are a set of policies that seek to integrate domestic markets internally; and the third set of policies aim to regulate the competitive structure of an industry to change the size of the industry that an individual firm captures. [...] The reason these estimated gains are larger than that estimated in the previous literature is due to the fact that the railroad encouraged the increase of economic activity in a distorted economy. [...] (2011) find that the railway played a role in the rise of the factory in the US context, though Hornbeck & Rotemberg (2023) find no effect on firm size in the US setting, but rather an increase in the number of firms. [...] Did the antitrust law and resulting competition push the US towards becoming the industrial leader by WW1? Alternatively, were cartels and the resulting scale important for industrial development and innovation? One example of a fruitful contribution to these issues is Gross (2020), who shows that collusion among US railroads in the 1880s enabled the adoption of a standard railroad gauge in the Un. [...] 3.1.1 Colonialism One of the most salient ways in which imperial countries shaped the terms of global trade was through conquest, empire building and the type of “gunboat diplomacy” which was used to forcibly open Japan and China to trade in the middle of the 19th century.