5 min read.Updated: 04 Aug 2022, 09:35 AM ISTRaghuram G. Rajan
Fortunately, there are tailwinds that could be unleashed
Economic commentaries nowadays are typically about inflation or recession, so let’s instead consider growth prospects once central banks get those challenges under control. As matters stand, there appear to be worrisome headwinds to growth. As most advanced-economy populations age, their labour-force growth is slowing, so there will need to be greater productivity per worker to compensate. But with investment in physical capital muted, labour productivity is unlikely to grow rapidly without significant innovation, either in work processes or products. While it initially appeared that increased telecommuting during the pandemic would enhance productivity (by saving time and avoiding the duplication of capital at home and in the office), many firms are rediscovering the value of having workers in the office at least for some of the time.
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