Recession and potential growth
The mechanisms through which a recession subsequently reduces productivity gains and therefore potential growth are well kn own: loss of productive capital, loss of human capital, increasing number of zombie firms. Can we actually see that recessions (in the late 1980s, in the late 1990s and in 2008-2009) have reduced productivity gains in OECD countries? We compare productivity gains in the 1980s, the 1990s, the 2000s and the 2010s in 20 OECD countries. We see that in 6 0 % to 70% of the cases, a recession leads to a fall in trend productivity gains .