Productivity Growth and Capital Investment in Rich Countries

SOURCE www.axios.com
Weak capital investment in rich countries has held back productivity growth over the last 15 years, but this trend may be changing. The pathway to higher incomes and standards of living relies on economies deploying their labor forces more productively.

Key Points

  • Weak capital investment impacts per-capita GDP negatively
  • Focus on deploying labor forces more productively is crucial for economic growth
  • Emerging markets have shown better productivity growth compared to rich countries

Pros

  • Potential for increased productivity and higher incomes
  • Optimism for future improvements in capital investment

Cons

  • Decline in capital investment post-2008 financial crisis led to lower per-capita GDP
  • Historically weak productivity growth in the U.S. and Western Europe