Longer-Run Issues Productivity and growth Our economy is strong and operating near its capacity. But we face important challenges when it comes to the longer-term growth rate of the economy. Long-term economic growth depends mainly on nonmonetary factors such as population growth and workforce participation, the skills and aptitudes of our workforce, the tools at their disposal, and the pace of technological advance.
Fiscal and regulatory policies can have important effects on these factors. The main long-run contribution monetary policy can make is to provide a stable macroeconomic and financial environment. The level of potential growth does have important implications for monetary policy.