I mentioned earlier the sluggish pace of wage gains in recent years, and while I do think that this is evidence of some persisting labor market slack, it also may reflect, at least in part, fairly weak productivity growth. There are many unanswered questions about what has slowed productivity growth in recent years and about the prospects for productivity growth in the longer run.
By conducting a monetary policy of extremely low interest rates, combined with exceptional measures such as bond purchases, are we stoking asset price bubbles and encouraging too risky lending practices by banks? Very low interest rates may encourage risk taking by the investors. This is actually one of the objectives. Our economies need more productive investments.