Publication

The first part of this paper poses the question of whether IT is the only cause for the EU’s productivity slowdown. The conclusion is that it is not. The non-IT part of the economy has not only contributed to the slowdown but appears to have crucially contributed to the EU-US growth gap as well. The second part of the paper shows that the growth slowdown comes from the reduction of non-IT capital deepening and the lack of acceleration in total factor productivity growth, and argues that the slowdown of capital deepening will continue.