Macroeconomics suffers from blind spot, says Borio
Misallocated resources can explain a large part of recent productivity slowdowns, says BIS economist
Economists who study only aggregate data may miss important processes that help shed light on the productivity slowdown that has plagued many advanced economies, Claudio Borio said in remarks today (January 10).
The head of the Bank for International Settlements’ monetary and economic department said such thinking left economists with a “blind spot”. For instance, aggregate data obscures credit misallocation during a boom and the lasting effects after a bust, he said.
An example BIS
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