This is in part because the crisis has lowered both capital growth, through a steep fall in investment, and labour supply, through higher structural unemployment. But it also reflects weak long-term trends in productivity. For example, between 2000-14 TFP increased cumulatively by only 1.5% in the euro area, while in the US it rose by 10.9% in the same period.
This not a situation over which we can be complacent, not least given the substantial damage that still remains from the crisis. Structural reforms can play an important role, in different ways, in addressing the challenges related to each production factor. Labour supply in the euro area will inevitably be affected by the impact of ageing societies.