{
  "title": "Gone with the Headwinds: Global Productivity",
  "publication": "Staff Discussion Notes, April 3, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2017/04/03/gone-with-the-headwinds-global-productivity-44758",
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  "summary": "Productivity growth—the key driver of living standards—fell sharply following the global financial crisis and has remained sluggish since, adding to a slowdown already in train before.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Productivity growth—the key driver of living standards—fell sharply following the global financial crisis and has remained sluggish since, adding to a slowdown already in train before.\n- The note finds that the productivity slowdown reflects both crisis legacies and structural headwinds.\n- Reviving productivity growth requires addressing remaining crisis legacies in the short run while pressing ahead with structural reforms to tackle longer-term headwinds."
    },
    {
      "heading": "Major findings: crisis legacies and mechanisms",
      "content": "- In advanced economies, the global financial crisis has led to “productivity hysteresis”—persistent productivity losses from a seemingly temporary shock.\n- Key crisis-related drivers behind hysteresis:\n  - Balance sheet vulnerabilities.\n  - Protracted weak demand.\n  - Elevated uncertainty.\n- These factors jointly triggered an adverse feedback loop:\n  - Weak investment → weak productivity → bleak income prospects."
    },
    {
      "heading": "Major findings: structural headwinds",
      "content": "- Structural headwinds, already present before the crisis, include:\n  - A waning ICT boom.\n  - Slowing technology diffusion.\n  - An aging workforce (as a contributing factor to slowing diffusion).\n  - Slowing global trade.\n  - Weaker human capital accumulation."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Short run: Address remaining crisis legacies to interrupt the adverse feedback loop of weak investment and weak productivity.\n- Medium to long run: Press ahead with structural reforms to tackle headwinds such as:\n  - Policies that boost technology diffusion.\n  - Measures to strengthen human capital accumulation.\n  - Reforms that mitigate effects of an aging workforce and support trade dynamism.\n- Overall approach: Combine crisis-remedial measures with structural reforms to revive productivity growth.\n\n---\n\n Content in this bundle\n\n- EXECUTIVE SUMMARY\n  - EXECUTIVE SUMMARY (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - EXECUTIVE SUMMARY (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/staff-discussion-notes/issues/2017/04/03/gone-with-the-headwinds-global-productivity-44758"
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    "Authors: Gustavo Adler, Romain A Duval, Davide Furceri, Ksenia Koloskova, Marcos Poplawski Ribeiro",
    "Published: April 3, 2017",
    "Series: Staff Discussion Notes",
    "DOI: https://doi.org/10.5089/9781475589672.006",
    "Productivity growth—the key driver of living standards—fell sharply following the global financial crisis and has remained sluggish since, adding to a slowdown already in train before.",
    "The note finds that the productivity slowdown reflects both crisis legacies and structural headwinds.",
    "Reviving productivity growth requires addressing remaining crisis legacies in the short run while pressing ahead with structural reforms to tackle longer-term headwinds.",
    "In advanced economies, the global financial crisis has led to “productivity hysteresis”—persistent productivity losses from a seemingly temporary shock.",
    "Key crisis-related drivers behind hysteresis:",
    "These factors jointly triggered an adverse feedback loop:",
    "Structural headwinds, already present before the crisis, include:",
    "Short run: Address remaining crisis legacies to interrupt the adverse feedback loop of weak investment and weak productivity.",
    "Medium to long run: Press ahead with structural reforms to tackle headwinds such as:",
    "Overall approach: Combine crisis-remedial measures with structural reforms to revive productivity growth.",
    "**EXECUTIVE SUMMARY**"
  ],
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