Lower real interest rates may harm productivity growth, researchers say

The Banque de France

Lower real interest rates may reduce productivity growth, a working paper published by the Banque de France argues.

In The pre-great recession slowdown in productivity, Gilbert Cette, John Fernald and Benoît Mojon look at data on productivity in the US and the four largest eurozone economies: Germany, France, Italy and Spain.

Total-factor productivity (TFP) in Italy and Spain "has been about zero or even negative", they find, "since at least the introduction of the euro in 1999". Some have

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