Investment Slowdown in Denmark: Diagnosis and Policy Options

Tigran Poghosyan

No 2018/161, IMF Working Papers from International Monetary Fund

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.

Keywords: WP; investment; model; Denmark; accelerator model; leverage; structural reforms; product market reform; investment slowdown; IMF staff calculation; OECD EU country; investment growth; Commodity markets; Gross fixed investment; Global financial crisis of 2008-2009; Labor productivity; Private investment; Global (search for similar items in EconPapers)
Pages: 41
Date: 2018-07-12
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Citations: View citations in EconPapers (1)

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