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Lacklustre investment in the Eurozone: Is there a puzzle?

Buti, M., Mohl, Ph., (2014), “Lacklustre investment in the Eurozone: Is there a puzzle?”,, 4 June.

Investment in the Eurozone is forecast to remain below trend until 2015, with a particularly large shortfall in the periphery. Low investment reduces aggregate demand, thus lowering short-term growth, and it also hampers medium-term growth through its effect on the capital stock. This article highlights three causes of low Eurozone investment – reduced public investment, financial fragmentation, and heightened uncertainty – and proposes a series of remedies.

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