October 8, 1999
1:30 p.m. - 4 p.m.
The Federal Reserve Bank of St. Louis hosted a workshop on Friday, Oct. 8, 1999, for interested academics and business people. The workshop focused on recent trends in labor and multi-factor productivity growth.
The idea for this workshop stems from a line in a speech by St. Louis Fed president Bill Poole, in which he said, "It now appears that the painful period of unusually slow productivity growth in the 1970s and 1980s is behind us." (April 16, 1999)
In addition to the main purpose of the conference, Workshop participants and attendants addressed the implications of an uptick in trend labor productivity growth for monetary policy makers. Although monetary policy has virtually no effect on the growth rate of labor productivityexcept perhaps over a very long horizonwhy does the Federal Reserve care whether the trend rate of productivity has changed? When deciding how much liquidity to supply to keep inflation low and stable (the goal of monetary policy), policy makers must have some idea of how fast the economy is capable of growing. How fast the economy can grow depends importantly on productivity growth. If too much liquidity is supplied the end result will be an acceleration in inflation. If too little liquidity is supplied the economy will slow needlessly.
The workshop program is as follows:
Productivity and Potential
GDP in the "New" U.S. Economy
Joel L. Prakken, chairman,
Macroeconomic Advisers, LLC
What Happens When the
Productivity Growth Rate Changes?: Modeling the Dynamics of the "New
Michael R. Pakko, economist,
Federal Reserve Bank of St. Louis
Has the "New"
Economy Rendered the Productivity Slowdown Complete?
Robert J. Gordon, Stanley G. Harris professor of economics,
Karl Whelan, economist,
Federal Reserve Board of Governors