See “Global Employment Trends 2014: The Risk of a Jobless Recovery,” International Labour Organization, Geneva, 2014. 2  This pattern has been well documented by Harvard professors Carmen Reinhart and Kenneth Rogoff, among others. BIS central bankers’ speeches  1  growth. As inflation targeters, the rate of potential output growth matters a lot to us.
It is a critical input to the appropriate path for policy rates. Lost potential from the crisis Cyclical factors have clearly been playing a starring role in this underwhelming recovery. During the crisis, demand plummeted and so did output. As workers left the labour force and firms cancelled capital investments or went out of business, potential output growth declined as well.