Working From Home Is Powering Productivity
Growth comes from both the increase in factor inputs like labour and capital, and from raw productivity growth. Working from home (WFH) increased about tenfold after the outbreak of the pandemic and has settled in at about five times its pre-pandemic level, notes Nicholas Bloom in this IMF article. This could counter slowing productivity and deliver a surge in economic growth over the next few decades. If AI yields additional output, the era of slow growth could be over. The impact of fully remote working, which has been adopted by about 10 percent of employees, is highly dependent on how well it is managed. One critique of the boom in working from home is the damage done to city centers. Retail spending has fallen in these areas, with the activity being relocated to the suburbs, and consumption expenditure has resumed its pre-pandemic trend. The author suggests that the large reduction in valuations of commercial office space is more problematic.
https://www.imf.org
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