Low productivity and wages lead to prolonged economic stagnation and low inflation.
The article investigates why there has been no increase in inflation despite economic recovery in OECD countries since 2014. The researchers found no evidence of a major change in inflation patterns. They suggest that low growth in wages and productivity leads to slow output growth and low inflation, which in turn results in low investment. This cycle of low productivity and low inflation continues due to a lack of labor and total factor productivity, leading to a decrease in investment spending.