To the extent that this allows skills to be retained and reduces costs of replacing  3  In economists’ jargon, the extent to which potential supply is endogenous. This opens the possibility of there being “multiple equilibria”, something my colleague David Miles has reminded us was a central message of Keynes but that has been lost to much of the latest generation of New Keynesian modelling. See “Monetary Policy and Forward Guidance in the UK”, a speech by David Miles, available at: http://www.bankofengland.co.uk/publications/Documents/speeches/2013/speech681.pdf. 4  David Reifschneider, William L. Wascher, and David W. Wilcox (2013). “Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy”, Finance and Economics Discussion Series 2013–77. Board of Governors of the Federal Reserve System (U.S.). http://www.federalreserve.gov/pubs/feds/2013/201377/201377abs.html. 5  See Alina Barnett, Maria Barriel, Adrian Chiu and Jeremy Franklin. “The Productivity Puzzle: Firm-Level Perspectives”, Bank of England Working Paper, forthcoming. 4  BIS central bankers’ speeches  particularly skilled employees as the recovery takes hold, the recovery could generate greater supply capacity and real wage growth as it proceeds. It would be unreasonable to expect these positive outcomes to materialise immediately. Weak growth may have meant that companies have missed out on productivity advances that would otherwise have been made through learning by doing. Skills have atrophied through underemployment rather than unemployment. The recovery will therefore need to be sustained for a period before productivity – and real wage – gains can resume in earnest.
There can hardly be any doubt that in the 1950s, price changes would have been less abrupt in Norway if the devaluation had not taken place.” See Odd Aukrust (1965): Tjue års økonomisk politikk i Norge: suksesser og mistak, [Twenty years of economic policy in Norway: successes and mistakes] Articles from Statistics Norway, no. 15. 16  Erlend Loe (1999): L, J. W Cappelens forlag, p. 376. 17  Loe (1999), pp. 397–398. 4  BIS Review 147/2010  against serious missteps, which seems to be particularly important when decisions are made under uncertainty. This notion is part of the justification for the jury system in our courts of law. The French philosopher Marquis de Condorcet’s now well known jury theorem states that the higher the number of the group is, the higher the probability is that the group will make the correct decision by majority vote. 18 Group decision making has been widely accepted, not only by the courts but also by business, public administration and elected governing bodies. In his book The Wisdom of Crowds, James Surowiecki cites a number of examples where large groups outperform individuals or small groups of experts. Contestants on the television game show Who Wants to Be a Millionaire? have various so-called “lifelines”, including telephoning a smart friend or asking the studio audience for help. It has transpired that the studio audience is the contestants’ absolute best bet.