Many factors have been proposed to explain the slowdown in productivity growth since the global financial crisis, says a UN report, 21 April 2017. “However, one factor that has received relatively less attention is the slowdown in international trade. By exploiting the firm heterogeneity dimension, recent advances in the literature on international trade offer interesting insights to understand the relationship between the weaknesses in global trade and the deceleration in productivity growth”.
“In sum, the recent advances in the literature of international trade in the context of heterogeneous firms offer interesting insights to understand the current trends for productivity and trade growth. In particular, it shows how trade, investment and technology decisions interact with each other and affects productivity growth, which also illustrates some of the self-propagating forces of the current situation of the world economy […]. Looking ahead, the risk of an even more protectionist stance in the international trade environment will exacerbate the challenges in reviving trade flows, investment and, ultimately, productivity growth in the world economy.” (p. 3)
Source: United Nations, Department of Economic and Social Affairs 2017
The Slowdown in Productivity Growth: A View from International Trade (Development Issues No. 11, 21 April)