Investment Slowdown in Denmark: Diagnosis and Policy Options

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.
Publication date: July 2018
ISBN: 9781484367537
$18.00
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investment , accelerator model , leverage , structural reforms

Summary