IMF chief warns living standards set to drop as productivity slows
Christine Lagarde says the post-crisis recession has left a ‘permanent scar’ on output per worker and total productivity
Washington — Living standards around the world could fall unless governments invest more in research and education that can help revive weak productivity growth, International Monetary Fund MD Christine Lagarde warned on Monday. Lagarde said in a speech in Washington that the private sector alone will not be able to generate enough innovation to lift productivity to acceptable levels without government help. Her remarks were accompanied by release of an IMF study that found that the 2008-09 financial crisis and deep recession played a bigger role in slowing productivity than previously thought, stifling global demand and investment. "Another decade of weak productivity growth would seriously undermine the rise in global living standards," Lagarde told an audience at the American Enterprise Institute, a pro-business think tank in Washington. "Slower growth could also jeopardise the financial and social stability of some countries by making it more difficult to reduce excessive inequa...
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