Covid, productivity and long-term growth: further secular stagnation or positive reversal?

While the spectacular Covid shock may easily lead to exaggerate extrapolations, it cannot be ruled out that it will matter for long-term productivity and growth. However, the effects could work both ways. Reasons why the current crisis could further worsen “secular stagnation” are many, yet there are also a channels through which it could work positively.

Since the 1970s, productivity gains in the developed economies have gradually slowed (from around 2% per year to less than 1% in the 2010s), despite intermediate cyclical rebounds (at the end of the 1990s in particular).

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