An important part of the answer to why the U.S. economy has been able to grow so strongly without inflation accelerating has been the recent resurgence in productivity growth. Productivity grew strongly from the end of World War II into the early 1970s, accounting for  3  BIS Review 55/1999  the rapid increase in American’s real incomes over that period.
Then, around the time of the first oil shock in the early 1970s, productivity growth slowed drastically both here and in other industrial countries, remaining weak in the U.S. through the 1980s and first half of the 1990s. Average growth in output per hour in non-farm business was only a little over 1 percent between 1973 and 1995.