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Anemic economic growth in advanced economies: structural factors and the impotence of expansionary macroeconomic policies

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  • Luigi Bonatti

Abstract

This paper assesses the role of some structural factors in determining the current anemic growth of the advanced economies, especially focusing on Southern Europe. It discusses what macroeconomic policies can do for reviving growth and illustrates some hypotheses: policy makers attempts to push GDP growth above its sustainable long-term rate through expansionary policies, excessive leverage and rising private and public debt generate instability and imbalances; economic fundamentals and easy credit push up the price of residential land and urban rents, thus crowding out investment in productive assets and depressing long-run growth; supporting asset prices, central banks may end up exacerbating the causes making growth anemic; Summers secular stagnation and its policy implications do not appear very plausible; the persistency of wide competitiveness imbalances among different areas determines an unequal spatial distribution of high value-added activities, which collides with the worldwide tendency towards the equalization of workers’ education levels and aspirations.

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  • Luigi Bonatti, 2016. "Anemic economic growth in advanced economies: structural factors and the impotence of expansionary macroeconomic policies," DEM Working Papers 2016/11, Department of Economics and Management.
    • Handle: RePEc:trn:utwprg:2016/11
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    More about this item

    Keywords

    Secular stagnation; competitiveness; global imbalances; Sovereign debt crisis;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F01 - International Economics - - General - - - Global Outlook
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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