Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298429 
Year of Publication: 
2022
Series/Report no.: 
Discussion paper No. 154
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
When assessing future growth prospects, does it matter how the economy grows now? In other words, does the current structure of demand affect future growth? This question is analyzed in our paper by using global and EU panel data. The result is quite striking: consumption-led growth - either in terms of private or public or total consumption - leads to slower growth compared with investment-led or exports-led growth. The same qualitative result emerges irrespectively of the length of the past growth period (lag window). It is only that the more often the past is characterized by consumption-led growth the slower the growth rate in the future. This is surely important news from the point of view of both structural and cyclical policies.
Subjects: 
Economic growth
demand management
consumption-ledgrowth
JEL: 
E21
E32
E50
F43
O40
Document Type: 
Working Paper

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