How can we move to a more favourable economic equilibrium with higher potential growth?
It is normal to fear that the COVID crisis, like the subprime crisis, could reduce potential growth in OECD countries, due to a loss of productive and human capital and a deterioration in companies’ balance sheets. How can this be avoided and, on the contrary, how can OECD countries be enabled to move to a more favourable equilibrium with higher potential growth, which is the only way to achieve deleveraging? There must of course be an acceleration in total factor productivity, which is complicated. This is because: Even though investments in new technologies are increasing (the "digitisation of the economy"), they create few skilled jobs and, on the contrary, shift employment to unsophisticated domestic services. New sophisticated industries (or services) would therefore have to develop and become large; It is not clear whether infrastructure investments increase potential growth; Labour force skills are low in many OECD countries, which is a major obstacle to the acceleration of total factor productivity.