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Investment Slowdown in Denmark: Diagnosis and Policy Options

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  • Mr. Tigran Poghosyan

Abstract

Total investment in Denmark has experienced a sharp slowdown following the global financial crisis. This slowdown has coincided with a decline in labor productivity and expansion of the current account surplus. This paper presents stylized facts summarizing the investment slowdown followed by an empirical analysis identifying its drivers. The results suggest that the decline in output has contributed to investment slowdown, consistent with predictions of the accelerator model. However, other factors, including high leverage and structural rigidities in product markets, also played a role.

Suggested Citation

  • Mr. Tigran Poghosyan, 2018. "Investment Slowdown in Denmark: Diagnosis and Policy Options," IMF Working Papers 2018/161, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/161
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