But the interaction between the continuing adjustment to the acceleration in productivity and further swings in oil prices will likely play an important role in shaping the macroeconomic outcomes and the challenges facing monetary policy over the next couple of years.
Appendix: Productivity and the NAIRU The model developed in this appendix supports both the analysis in the paper and the estimates of the magnitude of the disinflationary effect of an acceleration in productivity and of the short-run NAIRU. The model is based on a 1984 Board staff paper by Steve Braun.