Global growth prospects have clouded this year. A further sharp slowdown in emerging market economies (EMEs) is weighing on global activity and trade, and subdued investment and productivity growth is checking the momentum of the recovery in the advanced economies.
The slowdown in productivity over the past decade has added to concerns about the long-term economic outlook. But new OECD research shows that policy reforms can revive the diffusion of innovation and make better use of human talent to clear the path for higher productivity growth.
The magnitude of the recent crisis calls for revisiting policy approaches and building a new policy agenda for stronger, more resilient, inclusive and sustainable growth. New Approaches to Economic Challenges (NAEC) is a comprehensive organisation-wide reflection process to renew and strengthen the OECD’s analytical frameworks, policy instruments and tools.
Developments in income inequality have not been uniform across countries. In fact, between the mid-1990s and the late 2000s, OECD countries experienced “inequality convergence”: inequality in household disposable income has tended to fall in the most unequal countries and to rise in the most equal ones.
Environmental policies address wellbeing and sustainability objectives, affecting firm and household behaviour. A newly developed OECD indicator (EPS) shows that environmental policies have become more stringent over the past two decades.
As the effects of the crisis eventually subsides, the coming 50 years will likely see a major shift of economic balance towards emerging economies, particularly those in Asia, with the share in world GDP of non-OECD countries rising well beyond that of the current OECD area by 2060.