In a sense, forecasting is where the "rubber" of economic theory meets the "road" of the real world. As such, it is intellectually exciting and challenging. One of the foremost challenges has been forecasting productivity developments and their macroeconomic implications. As you know, productivity growth is the key source of higher living standards in the long run.
But, of course, it also is an important influence shaping shorter-run economic developments as well as monetary policy decisions. Today I will talk about some of the forces that drive productivity growth, the macroeconomic implications of changes in the longer-run trend of productivity, and the prospects for productivity growth.