The OECD Economic Policy Paper Series is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. An earlier version of this paper was discussed at the Working Party No. 1 of the Economic Policy Committee and an OECD seminar on New Approaches to Economic Challenges. The authors would like to thank the participants. They are very grateful to Lorenzo Codogno and Stefano Scarpetta, who chaired these meetings, for their insights. The authors are also indebted to Pier Carlo Padoan, Catherine Mann, Christian Kastrop and Jean-Luc Schneider for their guidance and to Paul O'Brien, Alexandre Cazeneuve-Lacroutz, Oliver Denk and Mathilde Mesnard for their comments. The authors express their gratitude to Jenifer Ruiz Valenzuela for her important econometric contributions to the industry-level analysis. They thank Pascal Marianna for his great help on micro-level databases and Celia Rutkoski for excellent editorial assistance. More detailed information is contained in the following papers: