Confronting the Zombies: Policies for Productivity Revival
The Peterson Institute for International Economics hosted an event to launch a new study from the Organization for Economic Cooperation and Development (OECD), Confronting the Zombies: Policies for Productivity Revival, on January 23, 2018. Giuseppe Nicoletti, the OECD’s head of Structural Policy Analysis Division (SPAD), introduced the study, and Dan Andrews, the OECD’s deputy head of SPAD, presented their important findings.
The OECD study examines an important but often ignored source of the productivity slowdown: the increasing prevalence of “zombie firms”—i.e., firms that would typically exit or be forced to restructure in a competitive market. These firms divert scarce resources from more productive firms and undermine the diffusion of new technologies across economies. But policy matters: The OECD study shows that reforms of insolvency regimes, banking supervision, and taxation could revive aggregate productivity growth by facilitating the restructuring or exit of weak firms. It also explores the complementary role of policies that manage the social costs of worker displacement.
Giuseppe Nicoletti has been heading the OECD’s SPAD since 2004, where he oversees cross-country structural studies. He has held several different positions at the OECD since 1986 and was a senior economist at the Italian Antitrust Authority from 1995 to 1997.
Dan Andrews has been with OECD since 2009. Prior to joining the OECD, he was a central banker at the Reserve Bank of Australia for a decade. He currently leads the Economic Department’s Productivity Workstream and his research generally exploits microdata to assess the impact of structural reforms on aggregate productivity.