One of the remarkable features of the economy over the past seven years or so has been the acceleration in the pace of innovative use of capital by workers, rather than increases in the amount of capital per worker.
Indeed, as I pointed out earlier, such innovation accounted for about one-half of the rapid increase in labor productivity that we observed in the late 1990s. Therefore, it is important to address the possibility that aging will affect the rate of innovation, either through a rearrangement of existing capital resources or through technological advance.