The Board’s broad article released on Friday:
Figure 1 shows the fact that the US has returned to the pre-Covid trend, while other economies have not (pity the poor UK, suffering from Covid and Brexit).
From the conclusion:
Our analysis points to the growing divergence between the US and AFEs as a result of various factors, including differences in monetary and fiscal policies, the diversity of labor institutions and capital markets, and the unique shocks of a particular region. At present it is challenging to judge how much of the functional difference is actually explained by each factor. Overall, our analysis suggests that structural factors play a role in how different economies respond to cyclical policies, and cautions against interpreting recent productivity developments as reflecting only permanent changes across the economy.
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