Leandro de la Escosura, Joan R. Rosés, 21 November 2020

The current productivity slowdown in advanced economies has triggered a lively debate about its causes and remedies. This column takes a long-run perspective to study drivers of productivity expansion and stagnation in Spain during the last 170 years. It finds that the productivity slowdown coincided with resource reallocation towards sectors attracting less innovation, with low investment in intangibles and low investment-specific technical change. Obstacles to competition in product and factor markets, subsidies, and cronyism further contributed to capital misallocation, negatively affecting productivity growth.

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