This is an archived version of the PW Sources newsletter from Saturday, March 2, 2024. Sign up to receive PW Sources directly to your inbox here.

LEADING TECHNOLOGIES

The CHIPS and Science Act aspires to draw the manufacturing of US leading technologies back into domestic supply chains. Speaking on the policy’s implementation, Secretary of Commerce Gina Raimondo stated earlier this week that the US is on track to manufacture 20 percent of leading-edge logic chips by 2030. 

In a 1976 memo for the US Department of Defense, FRED BUCY argued that preserving the US lead in strategic technologies—especially amid concerns around Soviet technological theft—required export controls to target technology transfers rather than commodity exports: 

“U.S. export control law applies to reexportation of strategic goods and technical data of U.S. origin to a third country by the receiving firm. Major allies of the U.S. do not have a similar law. They limit export control enforcement to acts performed within their own boundaries. Thus, strategic technology originated in these countries can be reexported through third countries to Communist nations without restriction. There is cause for concern for strategic technology possessed by foreign firms that have subsidiaries in non-Communist nations. This uncertain control and enforcement environment among several countries dictates that the key elements of a high-velocity strategic technology—one which has experienced a revolutionary gain—should not be exported to these countries. A nation that allows strategic technology to be passed on to Communist countries should be restricted from receiving further strategic technology of U.S. origin.”

+  “Bucy explained that the point of export controls was ‘not to interdict trade, but to delay an adversary’s acquisition of commercial technology of military significance for as long as possible.’ ” From Mario Daniels and John Krige’s 2022 book. Link. And see Ella Coon’s review of the text in PW. Link.

+  “In designing the controls, the US is making an implicit assumption that industry and partner resistance will eventually give way to alignment with US regulations.” Reva Goujin and JP Kleinhans on a package of stricter export controls against China, announced last October. Link. And William Alan Reinsch, Matthew Schleich, and Thibault Denamiel examine the impacts of the 2022 export controls. Link. 

+  “Simple observations of a geographical concentration of high-technology establishments cannot be taken prima facie as evidence of the new industrial cluster arguments.” Philip McCann and Tomokazu Arita on industrial clustering and the semiconductor industry. Link. 

NEW RESEARCHERS

Education and Extreme Poverty

AMORY GETHIN is a recent PhD graduate from the Paris School of Economics. His job market paper quantifies the role played by education in the decline of global poverty.

From the paper:

“In my benchmark specification, I find that private returns to schooling can account for about 50% of global economic growth and 70% of income gains for the world’s poorest 20% since 1980. They also explain 40% of the reduction in the share of the world’s population living in extreme poverty. On the whole, education has been a major source of global inequality reduction, driving a large share of income gains in low-income countries and among the poorest individuals in all world regions. This progressive nature of global educational expansion has intensified over time and has been most pronounced among recent cohorts. Given the predominant role that governments have had in providing education and other basic services to low-income households, this puts public policies at the center of the fall of global poverty. Combining measures of direct government redistribution from a companion paper with indirect investment benefits from education estimated in this paper brings the total contribution of public policies to global extreme poverty reduction to at least 50%.”

+ + +

+  “Countries can realize success with industrial policy rooted in the petroleum sectors in spite of the machinations of predatory elites.” New on PW, Jesse Salah Ovadia on the oil and gas sectors in Angola and Nigeria. Link. 

+  “The ELN has become significantly more powerful since 2017. In addition to gaining territory in the peripheries, the group has almost entirely consolidated several areas once under the control of the FARC-EP. ” Also new on PW, Jerónimo Ríos Sierra on the Petro government’s negotiations with the Colombia’s largest active guerrilla. Read it in English or Spanish.

+  “The IMF’s latest assessments of debt stress indicate that 10 countries were in debt distress, while 52 countries were in severe to moderate debt stress—currently totaling USD 3 trillion in debt, a doubling since 2010.” By Rajko Kolundzic. Link.

+  Banks raise their US real estate loss provisions amidst a commercial property crisis. By Rich Asplund. Link.

+  “We show that less-educated Americans differentially demand “predistribution” policies (e.g., a federal jobs guarantee, higher minimum wages, protectionism, and stronger unions), while more-educated Americans differentially favor redistribution (taxes and transfers).” Ilyana Kuziemko, Nicolas Longuet-Marx, and Suresh Naidu on changes in the Democratic Party’s voter base. Link.

+  Noah Barkin and Gregor Sebastian on Germany and China’s “zero-sum” economic relationship. Link. 

+  “As climate change creates greater uncertainty and impacts the quality of farm produce, farmers say guaranteed support from the government is essential to help them move beyond rice and wheat cultivation.” Vaishnavi Rathore on climate crisis and farmers’ protests in India. Link. 

+   A Kaufman Hall report on the role financial reserves play in not-for-profit healthcare. Link.

+   “This accelerated shift toward heavy industries in the throes of the Great Depression ultimately proved to be an epochal event in the nature of Yokohama’s role as a port of foreign trade. In the bargain, Yokohama’s primary function was transformed from a specialization in silk exports to the importation of goods and materials related to heavy industry. The port’s imports recovered faster than its exports, with the former finally surpassing the latter by 1935. Heavy chemicals went from 49 percent of the total value of manufacturing output in Yokohama in 1929, to 75 percent in 1935, then 83 percent in 1938. At the same time, the share of Yokohama’s exports occupied by heavy industrial manufacturing also grew from 15 percent of the port’s total export values in 1929 to 39 percent by 1935, then 50 percent in 1938. These new industries were fed by a growing Keihin industrial corridor, with machine parts occupying 39 percent, chemicals 24 percent, and metals 20 percent of the city’s total manufacturing values, respectively, by 1938. Thus, the 1930s were not simply a time of economic crisis for Yokohama, but also a time of profound and fundamental transformation in the nature of the city’s economy and consequently its role within the global economy.” By Jeffrey C. Guarneri. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org