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After the initial wave of the pandemic recedes, productivity will (have to) become yet again a primary concern of economists and policymakers. There are a number of reasons why this crisis might further impair productivity growth, including higher transactions costs (Baldwin and Weder di Mauro 2020), lower mobility, and a reduced scope of resource reallocation across firms, sectors, and countries. There might also be some positive impulses from induced innovation. Either way, policy will matter, and wise choices could mitigate productivitydecelerating effects of the crisis and enhance the influence of productivity-accelerating factors.

The world entered into the COVID crisis in the midst of a 15-year-long productivity growth slowdown. While much debated, there is not yet a consensus on its causes. Regardless, the potential effects of the current partial shutdown of the world economy on the trajectory of productivity growth is a critical question. In this column, we consider the channels through which the crisis might shift the growth rates of productivity and output.