IMF Staff Country Reports

Denmark: Selected Issues

September 13, 2024

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Format: Chicago

International Monetary Fund. European Dept. "Denmark: Selected Issues", IMF Staff Country Reports 2024, 293 (2024), accessed December 21, 2024, https://doi.org/10.5089/9798400288227.002

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Summary

This Selected Issues paper discusses the macroeconomic impact of the pharmaceutical sector. The analysis focuses on Novo Nordisk, the leading pharmaceutical company in Denmark, and its productivity impact on the rest of the economy. Empirical evidence suggests only weak correlations between productivity shocks at Novo Nordisk and overall economic growth, as well as between Novo Nordisk’s productivity and that of other firms. The findings suggest there is limited risk that Denmark’s booming pharmaceutical company would become its “Nokia.” Although the pharmaceutical sector will be a key driver of growth, most of its production occurs overseas under Danish ownership. As a result, its linkages with the rest of the domestic economy, in terms of employment and supply chains, are somewhat limited. The empirical results also indicate limited spillover effects through productivity channels. However, the empirical results may underestimate the influence of Novo Nordisk due to limited data.

Subject: Covered bonds, Financial institutions, Financial sector policy and analysis, Labor productivity, Nonbank financial institutions, Production, Productivity, Systemic risk assessment

Keywords: Covered bond bond market, Covered bonds, E. policy option, Energy firm, Global, Labor productivity, Mitigating factor, Nonbank financial institutions, Policy consideration, Productivity, Productivity shock, Shocks to Novo Nordisk, Systemic risk assessment

Publication Details

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