And the higher productivity that will result will increase the economy’s potential to grow. This will create new job opportunities widely throughout the economy, while also causing inflation to fall short of what our models would predict. So far, we have not seen signs of higher productivity in the economic data. Once again, the experience of previous industrial revolutions can be instructive.
In the last few years of the 1990s and early 2000s, we now know that productivity rose quickly. But the economic statistics of the time did not capture this until long after the fact because it is difficult to measure developments in new economic sectors. It is certainly possible that the same dynamics will emerge in the near future.