Orlando, Fla., March 11 (BridgeNews) - Productivity gains will lead to higher U.S. economic growth in the longer term, Federal Reserve Gov. Edward Gramlich told a business group late Sunday. He reiterated that the central bank must be flexible enough to respond to both inflationary and recessionary moves.
However, Gramlich failed to elaborate on the outlook for the U.S. economy or monetary policy.
* * * The bulk of Gramlich's speech to the Commonfund Forum 2001 focused on the spurt in productivity growth, which he said, "can be attributed largely to a combination of an investment boom and a technological revolution."
Gramlich's comments were largely unchanged from a speech he delivered in London on the same topic on Feb. 20.
He reiterated that changes in productivity will require "the central bank to respond to this multiple-variable complexity" as it changes not only labor markets but also capital stock, exchange rates, and real interest rates. But once again, Gramlich did not elaborate further. End
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