Research and development as well as human capital make also valuable contributions to total factor productivity growth. Moreover, meeting the challenges of innovation and its dissemination as well as ensuring the labour force’s employability and flexibility requires improved education and training, as well as lifelong learning. However, investment in human capital in Europe is still clearly inadequate for a “knowledge-intensive” economy.
In addition, in December 2012, the Committee modified its forward guidance for the federal funds rate, stating that “as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored”, the Committee would not even consider raising the federal funds rate above the 0 to 1/4 percent range.2 This “threshold based” forward guidance was deemed appropriate under conditions in which inflation was subdued and the economy remained unambiguously far from maximum employment.