Risks of Stagnation in the Euro Area

Huidan Lin

No 2016/009, IMF Working Papers from International Monetary Fund

Abstract: This paper discusses the risks of stagnation over the medium term in the euro area. It examines the consequences of longer-term growth trends that predate the crisis and the progress made in addressing the crisis legacies of high unemployment and debt. The paper illustrates in a downside scenario, how low potential growth and crisis legacies leave the euro area vulnerable to a negative shock that tips the economy into a prolonged slowdown.

Keywords: WP; euro; IMF staff calculation; crisis; Potential growth; Productivity; Deleveraging; Euro area; Downside scenario; interest rate; investment growth; service sector productivity; productivity gap; productivity frontier; Euro area business investment; productivity slowdown; labor productivity in the euro area; area difference; area business investment; Total factor productivity; Private investment; Inflation; Capital accumulation; Global (search for similar items in EconPapers)
Pages: 25
Date: 2016-01-22
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Citations: View citations in EconPapers (2)

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