The consequences of the pandemic for potential output will partly hinge on its impact on productivity-enhancing reallocation. While recessions can accelerate this process, the more ‘random’ nature of the COVID-19 shock coupled with policy responses that prioritised preservation could disrupt...

We present a new measure of producers’ aggregate importance in a production economy with input-output linkages. Unlike existing measures, which capture the impact of an isolated TFP shock to a sector on aggregate output, we quantify how a sector amplifies simultaneous shocks to all producers...

World leaders have declared the G20 to be the premier forum for economic cooperation. But as its influence and policy agenda has grown, so too has the need to be able to effectively model the G20 and the implications of its policy agenda. The paper introduces the G-Cubed (G20) model: a...

Technical change in key OECD countries since 1990 is examined in terms of its contributions to total factor productivity and to factor bias. The dependence of real income and inequality on changes in factor abundance, total factor productivity, factor bias, the relative cost of capital goods and...

The dependence of real income and inequality on changes in factor abundance, total factor productivity, factor bias, the relative cost of capital goods and the progressivity of the tax system are quantified using an elemental general equilibrium model with three households. Observed declines in...

In transitional economies like China, comparatively low real wages imply sub-OECD labor and skill shares of value added and comparatively high capital shares. Despite rapid real wage growth, however, rather than converge toward the OECD, China's low-skill labor share has been falling, due to...

Macro models have come under criticism for their ability to understand or predict major economic events such as the global financial crisis and its aftermath. Some of that criticism is warranted; but, in our view, much is not. This paper contributes to the debate over the adequacy of benchmark...

China's size limits its capacity to source further growth from exports and so the inevitable turn inward is in progress, as suggested by declining gross flows on its balance of payments relative to its GDP. Thus far, key home policy drivers have been fiscal expansion and public investment,...

In 2019, President Trump called on the U.S. Federal Reserve to cut interest rates to depreciate the U.S. dollar, which, according to the IMF, is overvalued by between 6 and 12 percent. This paper uses an intertemporal general equilibrium model to explore what would likely happen if the...

Productivity growth has flat-lined in most economies despite rapid advances in technology. Economists suggest competing explanations for this paradox. Some argue the current stagnation will persist given deep structural challenges, arguing that recent technological advances are no match for...