## Productivity Dynamics and Long-Run Growth: Principality of Liechtenstein

_Selected Issues Papers, April 21, 2026_

## Source details

**Canonical URL:** [Productivity Dynamics and Long-Run Growth: Principality of Liechtenstein](https://www.imf.org/en/publications/selected-issues-papers/issues/2026/04/21/productivity-dynamics-and-long-run-growth-principality-of-liechtenstein-575533)

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## Bibliographic details
- Authors: Tara Iyer, Andinet Woldemichael
- Published: April 21, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229045186.018

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### Overview
- This Selected Issues Paper analyzes productivity and long-run growth in Liechtenstein.
- Despite among the highest labor productivity levels in Europe, growth has been weak over an extended period, leading to declining relative performance.
- Sectoral differences persist between high-productivity manufacturing and lower-productivity services.
- The paper emphasizes that sustaining high living standards will require targeted structural reforms, including upgrading human capital, expanding labor supply, strengthening public-private innovation partnerships, and improving physical and digital infrastructure.

### Key findings
- Labor productivity: Liechtenstein is described as having among the highest labor productivity levels in Europe.
- Growth performance: Growth has been weak over an extended period, resulting in declining relative performance.
- Sectoral productivity: Persistent differences between high-productivity manufacturing and lower-productivity services are highlighted.
- Innovation: Private innovation is strong, but its potential is constrained by other factors.

### Constraints to long-run growth
- Demographic pressures.
- Skills shortages.
- Reliance on cross-border commuters.
- Infrastructure bottlenecks (physical and digital).

### Policy recommendations
- Upgrade human capital.
- Expand labor supply.
- Strengthen public-private innovation partnerships.
- Improve physical and digital infrastructure.

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- **Sipea2026033**
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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/04/21/productivity-dynamics-and-long-run-growth-principality-of-liechtenstein-575533_