So there is clearly still lots of work to do, and I hope to see more research dedicated to this subject in the future. Intangibles and Productivity I can now come full circle and consider the implications of the findings so far for another important equilibrium concept: potential output. As intangibles seem to be important for the puzzling weakness of investment, can they also help us rationalise recent developments in productivity and hence the implications for potential output? Page 14  Since the global financial crisis we have observed a substantial productivity puzzle. Average labour productivity growth in the United Kingdom has been around 1.3 percentage points lower since the crisis. While intangibles help to explain the missing investment puzzle, their effect on productivity is mixed as, if anything, there is evidence that they might be driving this productivity slowdown. Chart 9 shows that intangible-intensive industries have experienced the strongest slowdowns in labour productivity growth since the global financial crisis, consistent with a recent study by my colleague Jonathan Haskel. [23]  Chart 9: Productivity slowdown is stronger in intangible-intensive industries  Note: The y-axis shows the change in average labour productivity growth over 2008-2018 with respect to the 2000-2007 period. The x-axis covers the average share of intangible assets in total capital. Each ‘bubble’ represents an industry, with the area of the bubbles reflecting its share in total employment within each country, thereby measuring the industry’s contribution to aggregate labour productivity growth. EU4 consists of Germany, Spain, France and Italy. Source: Source.

In such an environment, to facilitate the flow of payments, companies with a substantial number of cross-border payments have to maintain bank accounts in all the countries in which they do business. Imagine enterprises in Poland had to keep bank accounts in each voivodship in order to operate efficiently, and each voivodship had a different settlement system and different legal regulations. Would enterprises in such a situation be able to operate as efficiently as they do now? What would it mean for the costs and competitiveness of Polish banks and prices of payment services? This fragmentation not only affects cross-border payments but also national euro payments, as it prevents innovation and competition on the euro area level. Payers and payees may also be subject to different rules and requirements depending on their country of origin. The creation of a common framework will create the opportunity for innovative payment solutions to be offered irrespective of national borders. The goal of SEPA is thus to create an integrated, competitive and innovative retail payments market for all non-cash euro payments, which, in time, will be conducted entirely electronically. As such, SEPA will benefit all customers. New payment instruments will be available throughout the euro area, making life easier for both consumers and business. Consumers will need only one bank account. From this account, they will be able to make euro credit transfers and direct debit payments anywhere in the euro area as easily as they make national payments.