Having said that, while these gains have so far been based mainly on the moderation of labour and financial costs, in the future they will have to come increasingly from genuine increases in productivity. Long-term growth of the Spanish economy: the challenge of productivity The productivity challenge  The timid gains in productivity seen in the past recession and subsequent recovery proved to be insufficient to close the gap separating us from the core European countries. The limited headway in productivity by the Spanish economy should be a cause for great concern, since productivity gains are the only mechanism which can generate sustained, stable growth of per capita income in the long term. The consensus in this respect in economic circles is practically unanimous, and the repute of the studies in this area is attested to by the Nobel prizes in economics awarded to Robert Solow and Paul Romer in 1987 and 2018, respectively, for their contributions in the fields of productivity and longterm economic growth. A few figures will suffice to illustrate how improvements in a community’s standard of living over the long term depend almost entirely on productivity gains. Thus, for example, 80% of the increase in US per capita income since 1948 can be attributed to the growth of total factor productivity (TFP).2 In other words, increases in TFP of around 2% per year have allowed the average US citizen to enjoy inflation-adjusted annual income which in 2015 was about $ 30,000 higher than in 1948.
However, there is evidence that older workers have fewer of the skills required to use new technologies because of their lesser human capital endowment, which moreover becomes depleted over time. Hence an older population may also pose difficulties for productivity growth because the digital technologies tend to complement each other better with less technologically challenged workers, who are usually younger.15 Moving on to the impact of ageing on the conduct of economic policy, it should be noted that, in the monetary policy arena, the central banks face a scenario which some have called “the new normal”, characterised by low interest rates and balance sheet expansion. Although part of this situation is unquestionably a legacy of the financial crisis, there are other longer-term causes which prompt the persistence of a low interest rate environment. Key among these are demographic factors acting through the associated increase in the saving rate. This scenario reduces the ability of conventional monetary policy to react to future crises and poses the advisability of a wide-ranging discussion on the most appropriate strategy for the conduct of monetary policy in the future. Fiscal policy, or, to be more specific, its government revenue side, is also affected by population ageing. There is evidence that the composition of income or the consumption basket change over the life cycle of individuals, so a change in the composition of tax bases could give rise to substantial variations in tax revenue.