From the Editor

From the Editor Finance & Development, March 2017, Vol. 54, No. 1

What to Do about Growth Deep unease about rising inequality and stagnatingliving standards in advanced economies was at theheart of the 2016 political upheaval. Globalizationand trade have been blamed, but entrenched slowgrowth—what economists call secular stagnation—may bethe real culprit. Parents who took for granted that their childrenwould enjoy a brighter future had their dreams dashedby the global financial crisis of 2008. Nine years later, risingpopulism and a return to nationalist, inward-looking policiesthreaten to unravel the postwar economic order.

As Nicholas Crafts of the University of Warwick arguesin our overview story, declining productivity growth—themain reason for slow growth and falling incomes—was evidentlong before the crisis struck. This issue of F&D looksat why and asks whether the world’s advanced economiesshould resign themselves to secular stagnation or hope thatthe right policies can revive productivity and lasting economicgrowth.

Diving into the causes of slow productivity growth, IMFeconomists Gustavo Adler and Romain Duval find rootsin the global financial crisis—tight credit underminednot only firms’ productivity but also the economy’s abilityto redirect capital. Other factors were also in play, especiallyaging populations. Ronald Lee of the University ofCalifornia, Berkeley, and Andrew Mason of the Universityof Hawaii, Manoa, argue convincingly that slower populationgrowth will almost certainly mean slower nationalincome and GDP growth. But they also show that the effecton...