Tight monetary policy is not the answer to weak productivity growth

a column by Maurice Obstfeld and Romain Duval for VOX: CEPR’s Policy Portal

The widespread and persistent productivity slowdown witnessed since the Global Crisis had already begun in advanced and low-income countries prior to the crisis. This column argues that the crisis amplified the slowdown by creating ‘productivity hysteresis’, and that monetary policy played an ambiguous role. Policymakers must now address the legacies of the crisis through innovation, education policies, and structural reforms.

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