For instance, there are studies based on general equilibrium models indicating that the contribution of capital to productivity growth is  3  Forsling & Lindström (2004)  4  See, for example, Stiroh (2001) and Jorgenson et al (2006). 5  Bernanke (2005)  BIS Review 61/2007  3  underestimated in growth accounting. 6 If we avoid such underestimations the residual item declines. Our knowledge has increased. And it is important for us at the Riksbank to increase our knowledge of the development of productivity and of what might explain it. One of the current projects at the Riksbank aims to obtain greater knowledge of how IT investment, reorganisation and further education together affect productivity. Better statistics lead to better analysis I would like to conclude this section with a few words on the considerable significance of economic statistics for being able to analyse productivity and the driving factors behind it. The previous US central bank governor, Alan Greenspan, was famous for his ability to take in large volumes of statistics. He became legendary when in the mid-1990s he was the first to predict that productivity growth in the United States would strengthen as a result of increased use of IT. This led to the central bank being able to conduct a more expansionary monetary policy for a period, without inflation rising. A few years ago I carried out an examination of economic statistics. My conclusions then were that these needed to be improved in four areas.
In the long 1 run, this will be offset by a corresponding depreciation of the krone. The international rise in prices for manufactured goods is lower than for services – around 1 per cent. The inflation target of 2½ per cent implies a depreciation of the Norwegian krone of around ½ per cent in the long term, because the target has been set somewhat higher than our trading partners’ inflation target. This means that goods prices measured in Norwegian krone must be expected to rise by about 1½ per cent in the long term. With wage growth of 4 - 4½ per cent, productivity growth in manufacturing must be about 2½ - 3 per cent to maintain profitability. For services, price inflation can be somewhat higher, about 3 – 3½ per cent, and productivity gains correspondingly lower. The size of the exposed sector will be affected by the portion of petroleum revenues that is absorbed into the Norwegian economy. In the long run, monetary policy cannot influence overall employment or its distribution across industries. Historically, employment in the internationally exposed sector has declined in waves. The sharpest declines in manufacturing employment were observed in the years between 1977 and 1984 and from 1987 to 1992. Both periods were preceded by a considerable deterioration in cost competitiveness in manufacturing. There is a risk of a new period of decline in manufacturing. The restructuring in manufacturing may take place rapidly. Competitiveness has deteriorated by about 10 per cent since 1996.