## Euro Area Policies: Selected Issues

_IMF Staff Country Reports, July 8, 2016_

## Source details

**Canonical URL:** [Euro Area Policies: Selected Issues](https://www.imf.org/en/publications/cr/issues/2016/12/31/euro-area-policies-selected-issues-44068)

## Other formats

- [Markdown version](/en/publications/cr/issues/2016/12/31/euro-area-policies-selected-issues-44068/index.md)
- [Structured JSON version](/en/publications/cr/issues/2016/12/31/euro-area-policies-selected-issues-44068/index.json)
- [Bundle manifest](/en/publications/cr/issues/2016/12/31/euro-area-policies-selected-issues-44068/bundle-manifest.json)

## Bibliographic details
- Published: July 8, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498353694.002

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### Summary and key findings
- The paper examines the impact of workforce aging on productivity in the euro area.
- The euro area population has aged considerably over the past few decades, and the process is expected to accelerate in the years ahead.
- Labor productivity growth in the euro area has been sluggish, posing risks to long-term growth prospects.
- It is estimated that workforce aging could significantly retard total factor productivity (TFP) growth over the medium to long term.
- Given current demographic projections from the Organisation for Economic Co-operation and Development, the aging of the workforce in the euro area could lower TFP growth by about 0.2 percentage points each year between 2014 and 2035.
- Appropriate policies can mitigate the adverse effects of aging.

### Quantitative projection
- Workforce aging impact on TFP: could lower TFP growth by about 0.2 percentage points each year between 2014 and 2035.

### Risks and implications
- Sluggish labor productivity growth increases risks to long-term growth prospects in the euro area.
- Accelerating population aging magnifies the potential drag on total factor productivity over the medium to long term.

### Policy recommendations (high-level)
- Implement appropriate policies to mitigate the adverse effects of workforce aging on productivity.
- Focus areas implied by the subject keywords include labor market policies, financial services and deposit/central bank policy considerations, and measures to support production and TFP.

### Subjects and keywords
- Subjects: Aging, Central bank policy rate, Deposit rates, Financial services, Labor, Labor force, Population and demographics, Production, Total factor productivity
- Keywords: Aging, Area budget, Central bank policy rate, CR, deposit rate, Deposit rates, euro, Euro area policy, euro area treasury, Europe, Global, IMF staff calculation, ISCR, Labor force, rate, Total factor productivity

*International Monetary Fund. Euro Area Policies: Selected Issues. July 8, 2016.*

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## Content in this bundle

- **Euro Area Policies: Selected Issues; IMF Country Report No. 16/220; June 22, 2016**
  - [Euro Area Policies: Selected Issues; IMF Country Report No. 16/220; June 22, 2016 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2016/_cr16220.pdf.md){rel="alternate" type="text/markdown"}
  - [Euro Area Policies: Selected Issues; IMF Country Report No. 16/220; June 22, 2016 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2016/_cr16220.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/euro-area-policies-selected-issues-44068_