## Denmark: Selected Issues

_IMF Staff Country Reports, June 20, 2018_

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**Canonical URL:** [Denmark: Selected Issues](https://www.imf.org/en/publications/cr/issues/2018/06/20/denmark-selected-issues-46002)

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## Bibliographic details
- Published: June 20, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484362556.002

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### Investment trends and empirical findings
- Post-global financial crisis (GFC) weakness in Denmark’s aggregate investment cannot be fully explained by the output slowdown.
- Baseline accelerator model findings:
  - Output slowdown played a role in the investment decline.
  - 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.
- Augmented accelerator model findings:
  - Additional factors had a significant impact on investment, including:
    - High leverage
    - Weak competition
    - Elevated policy uncertainty
- Panel regressions using a panel of advanced economies show:
  - Reduction in leverage can boost investment in the medium term.
  - Product market reforms can boost investment in the medium term.

### Policy implications and recommendations
- Well-designed policies are needed to boost private investment.
- Policy directions implied by analysis:
  - Implement measures to reduce leverage in the corporate sector.
  - Pursue product market reforms to strengthen competition.
  - Reduce policy uncertainty to support investment recovery.

### Keywords and topical focus (as presented in the source)
- 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

*Source: Denmark: Selected Issues, IMF Staff Country Reports, June 20, 2018.*

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_Source: https://www.imf.org/en/publications/cr/issues/2018/06/20/denmark-selected-issues-46002_