Real income of the population is also rapidly growing. For the past four years, it has risen by an average of 12% annually. Rapid growth in real personal incomes (compared to GDP) is due to dramatic improvements in terms of trade, caused by world oil price growth. From 2000 onwards, the federal budget enjoyed a surplus of revenue over expenditure.
Nevertheless, the rate of productivity growth influences the economy in important ways even in the short run, affecting key variables such as the growth rate of output, employment gains, and the rate of inflation. Today I will discuss the acceleration of productivity that has occurred over the past decade and our current understanding of its causes.