I delivered a paper about this a few weeks ago at a conference hosted by the Federal Reserve Bank of San Francisco. Besides, the near-term risks around productivity growth are tilted to the downside. This is because trade conflicts, and the emergence of nationalist or populist policies more generally, threaten to reverse some of the prior productivity gains made through globalization.
But more interestingly, real wages, which initially fall, as wages are brought closer to the labour market equilibrium, soon rise again, and end up also 3% above their initial level. Moreover, employment increases by almost 2%. Much of the early debate on structural reforms in Europe focused on the labour market. The product market has been in the focus more recently.