But from 2011 to 2020 we will see a more significant slowdown, as population growth continues to slow and the decline in the employment rate accelerates. Remember that if there is a slowdown in trend labour input and the trend rate of productivity growth remains unchanged, the growth rate of potential output will also slow down.
In other words, the economy will not be able to grow as quickly without sparking inflationary pressures. So it will be increasingly important that our economy uses the labour that is available in the most efficient way. What does this mean for policy-makers? To begin with, it means that we must remove any unnecessary barriers either to labour force participation or to labour mobility.