Advanced economies are enjoying a greater recovery than we expected a few months ago. The silver lining comes from improving health prospects, the power of government insurance (protecting income during lock-in periods), and the central bank’s facilitating cheap government borrowing. But this is still only recovery. Even the United States has not increased its activities to pre-pandemic levels, let alone achieved the expected output before the virus infection.

Until the economy continues to exceed the pre-Covid-19 GDP forecast levels, no one can use the phrase “better reconstruction” as a goal achieved. To succeed, advanced economies must increase the productivity of their labor. Only with a more efficient economy can we raise wages, improve living standards, and pay off coronavirus debt without adding additional pressure.

But productivity has been the Achilles heel of all major economies in this century. In the UK, the growth rate after 2005 dropped by 1.76 percentage points, from an average of 2.21% in the previous ten years to only 0.45%. The decline in the United States is almost the same, while Japan maintains the dubious honor of best performance, and the annual decline is still 0.8%.

In order to explain this poor performance, there is almost no solution, and many articles have been written. At one time, a handful of people blamed the 2008-09 global financial crisis, and few attempts have been made to identify common causes.

A kind New research The University of Oxford at Oxford Martin College strives to solve many of these problems by carefully using international evidence and accepting that there will never be a completely clean answer. It managed to rule out some possible causes, including a decline in the skill level of employees (which seems to be important only in Germany) or incorrect measurement of data (which cannot fully explain part of the crisis).

Instead, the authors determined that the reasons are broad and common to all countries. These are the lower growth of investment in all forms of capital (digital, machinery, transportation equipment, and intangible assets) and the deterioration of the way capitalism works. The problem of investment growth is roughly divided into two parts between the cyclical factors caused by insufficient demand after the financial crisis and the shift to intangible investment and other structural forces. In this intangible investment, the slowdown in growth has caused more extensive economic progress. Great damage. Elsewhere, deeper system failures reduce competitive pressures, allowing companies to increase profit margins without increasing efficiency.

This work is very helpful because it provides us with a framework to judge whether countries have developed Covid-19 recovery policies. Only by pulling demand to achieve a “high-pressure” economy, and hope that the subsequent productivity growth will not succeed.This article estimates that this element accounts for Up to 0.4% Therefore, more demand and expenditure must be accompanied by attempts to improve the operation of the economy, make the company’s life less comfortable, intensify competition and re-commit to globalization.

They show that countries can take certain clear steps to improve the lives of their citizens without having to hope that new technologies will generate a wave of productivity that they can manage. For example, the Biden government will receive high marks for improving demand and seeking to increase investment, but it still fails to meet its commitment to expanding international competition through its “Buy America” ??trade policy.

There are often differences in economics circles between countries that promote strong demand and those that hope to restore the vitality of the past few decades through supply-side policies. The fact is that both are necessary, and even then, they still cannot guarantee success.

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