Growth Welfare Innovation and Productivity

Well before the Great Recession, the strikingly successful socio-economic regime of growth of the three decades after WWII came to an end as the smooth matching among technological innovation, productivity growth, income distribution and aggregate demand increasingly broke down. However, a new virtuous regime is hardly emerging and growth of income and productivity remains sluggish especially in Europe.

The main objective of GROWINPRO is twofold. On the one hand, we will offer an in-depth analysis of the causes underlying the productivity puzzle and the associated economic stagnation addressing the whole interaction among innovation, productivity, and growth in a world undergoing a 'IV Industrial Revolution', wherein globalization exacerbated the diverging patterns of value distribution among countries and social groups. On the other hand, we will develop a coherent policy toolkit to escape the low-growth trap facing at the same time important societal challenges such as climate and demographic changes. It will thoroughly study the effects of monetary, fiscal and mission-oriented policies in stimulating productivity and output growth. The policy recommendations will be grounded on solid micro-, meso- and macro analyses.

Within the consortium consisting of 10 leading European research institutions and 3 Statistical offices, ZEW investigates

• the link between productivity and the changing balance of product-process over time and across sectors,
• the development and diffusion of new technologies (IV industrial revolution, AI) and their impact on productivity, and
• the role of incumbents and entrants as carriers of innovation and productivity growth.

More information can be found on the project website.