Discussion in 'Economics' started by curis, Jun 10, 2006.

  1. curis


    More productivity gains coming

    Fed chief tells grads the gains of the last 10 years will still run as new technology filters into the workplace.

    The revival in business productivity since the mid-1990s still has a ways to run, since it takes time to fully tap the potential of new technologies, Federal Reserve Chairman Ben Bernanke said Friday.

    “This productivity revival augurs well for the future of the U.S. economy,” Bernanke said in a commencement address at the Massachusetts Institute of Technology.

    “Research also suggests that the current productivity revival still has some legs, as the full economic benefits of recent technological changes have not yet been completely realized,” said the U.S. central bank chief, who earned his economics doctorate at MIT in 1979.

    Bernanke said U.S. productivity — a measure of business efficiency that is the basic building block of rising living standards — remained strong today.

    He did not address current economic conditions in more detail, nor did he comment on the outlook for Fed policy.

    Bernanke touched on several possible explanations for why new technologies had led to a greater productivity pick-up in the United States than in Europe, saying one leading explanation was the flexibility of U.S. labor and product markets.

    “These market characteristics have allowed the United States to realize greater economic benefits from the new technologies,” he said.

    The one-time professor, who took the helm at the U.S. central bank in February, also said some observers believed “the depth, liquidity, and sophistication” of U.S. financial markets also had contributed by helping to facilitate the start-up of new enterprises.

    Bernanke said management practices may also play a role, as may “relatively more positive attitudes toward competition and entrepreneurship.”

    Bernanke urged the graduates to pursue professional opportunities that excited them intellectually. “The world has a great deal more to offer than money,” he said.

    “And remember that it is OK to fail — really. New opportunities will always arise for those who seek them.”