My focus is therefore not on structural change per se but rather on the uncertainty about key parameters likely to be heightened during a period of structural change. However, the key structural change during this episode - an increase in the underlying productivity growth trend - has also set in motion a complex of effects on inflation, interest rates, equity prices, and aggregate demand.
Even if we knew the precise value of the higher productivity trend, we would likely remain uncertain about the size and persistence of many of its effects. As a result, adapting monetary policy to a higher trend rate of productivity growth would be a challenge, especially in an interest-rate setting regime, even if there were no uncertainty about the new underlying growth trend.