There are lots of reasons why the economy might be both more productive and less inflation prone than it used to be: • • • • •  more global competition deregulation of airlines, trucking, telecommunications; decline of barriers among financial services the computer and telecommunication revolution (finally) making cost savings possible, not just in manufacturing, but in services more flexibility and incentives built into wages, less unionization, out-sourcing of specialized services, use of temporary and part-time employees high levels of investment, including human investment - on-the-job and other skill training.
We talked about it yesterday in our meeting in Riga, which the Governor of the Banque de France was attending. We have all made the same assessment – the economy went through a short soft patch in the first quarter of 2018, because growth had been very strong at the end of 2017. Exports and global trade, in particular, were extremely buoyant in 2017.