A "leap in technical progress" after the coronavirus crisis?
Some economists hope for rapid productivity gains in OECD countries after the coronavirus crisis thanks to a "leap in technical progress": increased use of new technologies, remote working, reshoring of strategic industries. This view seems very optimistic as productivity gains may, on the contrary, slow down even more after the coronavirus crisis: Reshoring will make value chains less efficient; The increased corporate debt levels will lead to a major increase in the number of "zombie" firms that do not develop or innovate; The persistently weak demand for durable goods will shift the economy towards the least productive sectors; Companies' recovery effort will lead to lasting weakness in investment and capital accumulation; Capital will also be destroyed in sectors that are permanently affected by the crisis and the reallocation of employment between sectors may also be negative; Health measures, some of which will be permanent, will weaken productivity.