00:00Now, I will avoid speculating about the potential of AI for now.
00:04Rather, I'll take a step back and examine the key implications of a shift in trend productivity growth for the
00:10economy through the lens of historical experience.
00:13To give you a bit of a spoiler, my answer to the question of the effects of a shift in
00:19trend productivity growth on the economy and monetary policy is, unsurprisingly, it depends.
00:25In particular, it depends on the nature and the expected duration of the shift in question.
00:30So this is the ideal time for me to give the standard Fed disclaimer that the views I express today
00:35are mine alone and do not necessarily reflect those of the Federal Open Market Committee or anybody else in the
00:40Federal Reserve System.
00:43So as I try to answer this question, I'll point out something that I call the recognition problem.
00:48This means that while shifts in trend productivity growth may appear crystal clear in hindsight, it often takes years to
00:56distinguish them from the normal ups and downs in the data.
01:00The gradual recognition of shifts in productivity growth has profound implications for how economies respond.
01:06Of course, forecasters and policymakers possess a wide range of views and perspectives in these situations.
01:12But what's important for this discussion is how overall perceptions evolve and how that, in turn, affects the behavior of
01:19the economy.
01:20Now, U.S. productivity growth data reveal that high-frequency fluctuations dominate the picture.
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