Rodrik on Globalization, Development, and Employment

Dani Rodrik talks with host Russ Roberts about trade, the labor market, and trade policy. Drawing on a recent paper with Margaret McMillan on trade and productivity, Rodrik argues that countries have differing abilities to respond to increases in productivity. When workers are displaced by productivity increases, what is their next best alternative? He argues that poor countries should subsidize new products as a way of overcoming uncertainty and externalities from new ventures.