IMF Working Papers

Investment Slowdown in Denmark: Diagnosis and Policy Options

By Tigran Poghosyan

July 12, 2018

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Tigran Poghosyan. Investment Slowdown in Denmark: Diagnosis and Policy Options, (USA: International Monetary Fund, 2018) accessed December 3, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Total investment in Denmark has experienced a sharp slowdown following the global financial crisis. This slowdown has coincided with a decline in labor productivity and expansion of the current account surplus. This paper presents stylized facts summarizing the investment slowdown followed by an empirical analysis identifying its drivers. The results suggest that the decline in output has contributed to investment slowdown, consistent with predictions of the accelerator model. However, other factors, including high leverage and structural rigidities in product markets, also played a role.

Subject: Commodity markets, Financial crises, Financial markets, Global financial crisis of 2008-2009, Gross fixed investment, Labor productivity, National accounts, Private investment, Production

Keywords: Accelerator model, Commodity markets, Denmark, Global, Global financial crisis of 2008-2009, Gross fixed investment, IMF staff calculation, Investment, Investment growth, Investment slowdown, Labor productivity, Leverage, Model, OECD EU country, Private investment, Product market reform, Structural reforms, WP

Publication Details

  • Pages:

    41

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/161

  • Stock No:

    WPIEA2018161

  • ISBN:

    9781484367537

  • ISSN:

    1018-5941