Gone with the Headwinds: Global Productivity

Abstract

Addressing crisis legacies may be the most promising avenue for boosting productivity growth in the near term, particularly in continental Europe, where the scars from the global financial crisis remain greater than in most other advanced economies. Stimulating demand, including by addressing remaining weak corporate and bank balance sheets, reducing policy uncertainty, and boosting investment on high-return infrastructure projects, would induce greater private investment and risk-taking and improve capital allocation. This could turn around the feedback International Monetary Fund.