NY Fed speeches
“at that time stock exchange floors were loud places crowded with people and paper, Paul Volcker was the Federal Reserve chairman, having helped steer the country out of a period of high inflation, and a single European currency remained just an idea.”
Williams links 1970s productivity slowdown to stagflation and 1990s-2000s boom to low-inflation prosperity.
“The productivity slowdown of the 1970s contributed to stagflation. And the productivity boom of the late 1990s and early 2000s was a contributing factor to that decade’s economic prosperity with low inflation.”
Williams identifies two distinct productivity regimes: 3 percent during boom periods versus 1.5 percent otherwise.
“In each of these episodes, productivity growth averaged around 3 percent. At other times, relatively slow productivity growth of around 1-1/2 percent prevailed.”