Thinking outside the box…

Productivity and the intangible economy institutions

Haskel and Westlake argue that as the importance of intangible investment increases relative to tangible investment, productivity will continue to remain low until “governments design the institutions an intangible economy needs, and until its commercial, legal, and ethical norms are worked out.”

Productivity and secular stagnation in the intangible economy
By: Jonathan Haskel, Stian Westlake – Imperial College

Finance and productivity

We show theoretically and empirically that there exists an equilibrium where high productivity firms actually hold more liquid assets and less capital than low productivity firms, due to an overwhelmingly strong precautionary savings motive associated with significant financing frictions. Improvements to the financial market, such as reduction of financing costs, could redistribute capital more efficiently across firms, leading to an overall increase in aggregate productivity.

Productivity and Liquidity Management Under Costly Financing
Authors: Felix Zhiyu Feng, Jianyu Lu, Jing Wang
From: University of Notre Dame

Insolvency reforms and productivity

Andrews and al. show how the implementation of reforms aimed at facilitating the efficient corporate restructuring of “zombie” firms can revive productivity growth.

Confronting the zombies – Policies for productivity revival
Authors: Dan Andrews, Muge Adalet McGowan, Valentine Millot
From: OECD

Productivity and GDP growth: which way is the causality

Leon Podkaminer using data on 22 countries finds that output growth is followed by higher productivity – while productivity improvements have been much less likely to affect output growth.
The slowdown in labor productivity growth is an effect of economic stagnation rather than its cause
Author: Leon Podkaminer
From: The Vienna Institute for International Economic Studies