Indeed, most observers are confident that productivity growth will remain elevated and that the continued pace of innovations will, in time, contribute to a solid rebound in investment. Still, it is true that some will have confidence in the structural productivity story only when it is tested by a cyclical decline.
But, at least for the time being, the probability of this seems to have declined a little. Obviously how things play out on this front will have a major bearing on how the world economy evolves over 2012. A related issue that I suspect will be discussed frequently in 2012 and beyond is the impact of fiscal consolidation on economic growth.