IMF Staff Country Reports

Denmark: Selected Issues

June 20, 2018

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Denmark: Selected Issues, (USA: International Monetary Fund, 2018) accessed October 14, 2024

Summary

This Selected Issues paper analyzes investment slowdown in Denmark. The post-global financial crisis (GFC) weakness in Denmark’s aggregate investment cannot be fully explained by the output slowdown. The baseline accelerator model confirms that output slowdown played a role, but post-GFC investment has fallen beyond the level explained by output movements in most of the post-GFC period. Most recently, investment converged to the level explained by output movements. The augmented accelerator model suggests that additional factors, such as high leverage, weak competition, and elevated policy uncertainty, also had a significant impact. Panel regressions using a panel of advanced economies show that reduction in leverage and product market reforms can boost investment in the medium term. Well-designed policies are needed to boost private investment.

Subject: Asset prices, Commodity markets, Consumption, Expenditure, Financial markets, Income, National accounts, Pension spending, Prices

Keywords: Asset, Asset prices, Commodity markets, Consumption, CR, Exit tax, Firm, Global, High-tech firm, IMF staff calculation, Income, Interest rate, Interest rate shock, Investment, Investment slowdown, ISCR, Pension spending, Product market reform, Tax rate

Publication Details

  • Pages:

    75

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Country Report No. 2018/178

  • Stock No:

    1DNKEA2018002

  • ISBN:

    9781484362556

  • ISSN:

    1934-7685