Policymakers have long accepted the central role of innovation in spurring aggregate productivity and growth. They have looked at the arrival of new systems of organization and new technologies, from the steam engine to electricity and the internet, as catalysts to material progress in the modern age. But in doing so, they may have underestimated the importance of another … [Read more...] about When an Excess of Small Firms Hurts Productivity
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Jumping to Higher Productivity and Income
How should Latin American countries invest in capabilities to boost their per capita incomes? Research at the IDB suggests that much of the gap in income per-capita levels between Latin American countries and the United States is due not to the amount of capital accumulated. Rather it is a result of drops in the region's productivity levels vis-à-vis the U.S. The trick is … [Read more...] about Jumping to Higher Productivity and Income