By contrast, other recent work does not find a strong case for a meaningful further slack. 6 The issue has important implications, since changes in participation can have material effects on the unemployment rate: Holding the level of employment constant, a 25 basis point change in the participation rate would lead roughly to a corresponding 40 basis point change in the unemployment rate.
Longer-Run Issues Productivity and growth Our economy is strong and operating near its capacity. But we face important challenges when it comes to the longer-term growth rate of the economy. Long-term economic growth depends mainly on nonmonetary factors such as population growth and workforce participation, the skills and aptitudes of our workforce, the tools at their disposal, and the pace of technological advance.