ECB’s Lagarde: Economic Growth Needs New Ideas to Overcome Bottlenecks

22 April 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Monday said that in the context of a changing global economy and a deceleration in productivity, economic growth required that bottlenecks be overcome with new ideas.

In a speech at Yale University, the text of which was published to the website of the ECB, Lagarde said, ‘It is by generating new ideas, and creating the conditions in which they can spread and flourish through our economy, that we can drive future growth.’

‘What truly unlocks growth is when these three forces combine: when ideas translate into innovations, innovations diffuse into productivity growth, and our societies have the necessary ambition to remove any barriers that are in the way’, she elaborated.

Globalisation was going into reverse, she said, which put access to key resources at risk. At the same time, the emergence of new ideas across major economies was positive for global productivity, she said.

‘[A]s globalisation recedes and technological change accelerates, all economies are facing bottlenecks in transforming these ideas into sustained productivity growth’, she said.

In this context, Europe and the United States were collaborating and should continue working together to overcome similar bottlenecks, she said.

‘In other words, we should not become engaged in a subsidy race between our economies, which creates a zero-sum game’, she said. ‘We should instead ensure that we use our collective weight in international trade to discourage others from anti-competitive practices, while increasing the free flow of ideas amongst ourselves – a positive-sum game.’