Savers  6  See O. Blanchard, G. Dell’Ariccia, and P. Mauro, 2010. “Rethinking Macroeconomic Policy”, IMF Staff Position Note, February 12, 2010; and L. Ball, 2013. “The case for 4% inflation,” Voxeu. 7  See C. Sims, 2014. “Coordinating Monetary and Fiscal Policy to Exit the Zero Lower Bound”. Presentation made at the European Central bank. https://www.ecb.europa.eu/events/pdf/conferences/141215/slides/ SIMS_slides.pdf.
Many of these forces continue to operate in today’s 6 economy, conceivably with greater force than in the late 1990s. In addition, measured labor productivity has continued to increase rapidly since early 2001--remarkably so, considering that productivity tends to be strongly procyclical--raising the possibility that we have underestimated the degree to which innovation and better use of existing resources have increased potential output.