Reduced investment due to balance sheet vulnerabilities might be partly to blame for the decline in productivity growth which has plagued advanced economies since the financial crisis, a working paper published by the IMF suggests.

Authors Romain Duval, Gee Hee Hong, and Yannick Timmer reject the view the productivity slowdown is solely as a result of “slow-moving” structural forces and look to examine firm exposure to the crisis.

The authors explain that when credit markets froze after