Gone with the Headwinds: Global Productivity

By Gustavo Adler, R. Duval, Davide Furceri, Sinem Kilic Celik, Ksenia Koloskova, Marcos Poplawski-Ribeiro. 2017

149 citations recorded by the source corpus.

Productivity growth—the key driver of living standards—fell sharply following the global financial crisis and has remained sluggish since, adding to a slowdown already in train before. Building on new research, this note finds that the productivity slowdown reflects both crisis legacies and structural headwinds. In advanced economies, the global financial crisis has led to “productivity hysteresis”—persistent productivity losses from a seemingly temporary shock. Behind this are balance sheet vulnerabilities, protracted weak demand and elevated uncertainty, which jointly triggered an adverse feedback loop of weak investment, weak productivity and bleak income prospects. Structural headwinds—already blowing before the crisis—include a waning ICT boom and slowing technology diffusion, partly reflecting an aging workforce, slowing global trade and weaker human capital accumulation. Reviving productivity growth requires addressing remaining crisis legacies in the short run while pressing ahead with structural reforms to tackle longer-term headwinds.

View Paper: https://www.semanticscholar.org/paper/1903fa162ff00a6c80f725d0739bae4d08199989

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1. M. D. Ridder
2. Łukasz Rachel
3. Lawrence H. Summers
4. Gee Hee Hong
5. R. Duval
6. Yannick Timmer
7. Sebastian Edwards
8. David A. Lesmond

Citations in the corpus

• Market Power and Innovation in the Intangible Economy (2019, methodology): “, Adler et al. 2017 and Calvino et al. 2016). The rise of market power and firm concentration, however, seems to be larger in the United States. Döttling et al. (2017) and Cavalleri et al. (2019) find no increase in industry concentration in Europe between 2000 and 2013, using Bureau van Dijk’s Orbi”
• On Secular Stagnation in the Industrialized World (2019, methodology): “These caveats notwithstanding, numerous studies – for instance, Adler et al. (2017) – reach the conclusion that trend growth rates of both productivity and of TFP have declined significantly in advanced economies, first in the early 1980s when TFP growth halved from about 2% to 1% per annum, and the”
• Financial Frictions and the Great Productivity Slowdown (2017, background): “Productivity growth has declined in advanced economies since the global financial crisis (GFC) and has remained weak ever since (Adler et al., 2017; OECD 2015).”