Macroeconomic policy and potential growth

Jerome Creel and Maurizio Iacopetta ()
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Maurizio Iacopetta: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: We make the case for investigating the gap between the potential and the actual level of production, and review contributions that point to the reduced power of standard policy in- struments in presence of a prolonged gap. We also highlight di¢ culties in measuring where an economy stands relative to its potential. We review links between human capital accumulation and technology, and sketch a basic Schumpeterian model that puts at the center stage of the growth process investments in innovation and the foundation of new Örms, arguably two key sources of growth that could revitalize the faltering European Economies. The gap between the short and long run behavior is illustrated through quantitative experiments.

Keywords: Macroeconomic policy; Potential growth; Human capital accumulation; Innovation and technology; Eurozone (search for similar items in EconPapers)
Date: 2015-05-01
Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03459896
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Related works:
Working Paper: Macroeconomic Policy and potential growth (2015)
Working Paper: Macroeconomic policy and potential growth (2015)
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