Balance sheet weakness and falling investment to blame for productivity slowdown – paper
IMF paper rejects structural hypothesis for slowdown in productivity growth following crisis
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
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