Limited growth boost from revised “third arrow”

The revised “Growth Strategy” published this week contained some positive surprises. In particular, it proposes a revision of the tax and social security system that could result in a sizeable boost to the number of women in paid employment. However, the Strategy does not adequately address the shrinking workforce, which is the main factor holding back the economy. What’s more, policymakers retain an interventionist mindset which will continue to restrain productivity gains.