In my talk today, I will report the results of research that I have done on this topic with Kenneth Kuttner of the Federal Reserve Bank of New York, as well as the findings of some related work done both 1 within and outside the Federal Reserve System.
Although its recovery has been slower than previous economic expansions, the US is the main bright spot in the global economy. But even here there are significant puzzles around the labour market and investment climate. Why, for example, has recent US labour productivity growth been so slow, and what explains the substantial wage moderation and weakness in business investment at this stage of recovery?