Investment Slowdown in Denmark: Diagnosis and Policy Options

Author/Editor:

Tigran Poghosyan

Publication Date:

July 12, 2018

Electronic Access:

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Summary:

Total investment in Denmark has experienced a sharp slowdown following the global financial crisis. This slowdown has coincided with a decline in labor productivity and expansion of the current account surplus. This paper presents stylized facts summarizing the investment slowdown followed by an empirical analysis identifying its drivers. The results suggest that the decline in output has contributed to investment slowdown, consistent with predictions of the accelerator model. However, other factors, including high leverage and structural rigidities in product markets, also played a role.

Series:

Working Paper No. 2018/161

Subject:

English

Publication Date:

July 12, 2018

ISBN/ISSN:

9781484367537/1018-5941

Stock No:

WPIEA2018161

Pages:

41

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