Nevertheless, this process could be concealed for a time by even small increases in productivity in the remaining stages of production. I think it is becoming increasingly plain that the Fed's failure to really explain what is happening to the American economy has driven it to making ad hoc statements. This failure is why it cannot explain the coming bust even though it knows it is on its way. The Austrian school of economics blames credit expansion for the trade cycle. This is all very superficial and third rate.
Capital is the material means of production.
It is this that raises real wages and living standards. If information technologies are the same as nineteenth century and twentieth century transport technologies or power generating technologies in the sense that they lengthen the capital structure then they will raise living standards. But it must also be remembered that only savings can fuel investment. Without savings, an economy is doomed to decline.