there ’ s still no rush, ” speech delivered at the economic club of new york, new york, march 27, https : / / www. federalreserve. gov / newsevents / speech / waller20240327a. htm. - 9thinking about how fast their economies can grow without inducing inflation. central bankers must keep their eyes on productivity in judging whether wages can grow quickly without igniting inflation or whether potential growth has increased. productivity growth also plays a role in assessing the real neutral policy rate, otherwise known as r *. higher productivity growth is often associated with a higher value of r * for some policymakers and thus has implications for the interpretation of the degree of monetary accommodation or restrictiveness for policy. 8 one way to try to understand some of the factors affecting productivity is to compare the united states to other oecd countries. while it is not particularly new for productivity to grow faster in the u. s. than in other advanced economies, some differences in our economies may have been particularly salient during and after the pandemic. 9 first, there was more disruption in employment in the united states during covid than in many other oecd countries and after the pandemic subsided this may have led to better matching of workers with new jobs at which they could be more productive. second, during the acute u. s. labor shortages in 2022 and 2023, i heard numerous anecdotes that firms had to invest more in worker training to raise skill levels to what was necessary for positions. this raises labor productivity with a delay, and it may have been an important factor recently. third, business creation is, by all evidence, for a discussion of the relationship between these series, see thomas laubach and john c. williams ( 2003 ), “ measuring the natural rate of interest, ” review of economics and statistics, vol. 85 ( november ), pp. 1063 – 70 ; and kathryn holston, thomas laubach, and john c. williams ( 2023 ), “ measuring the natural rate of interest after covid - 19, ” staff reports 1063 ( new york : federal reserve bank of new york, june ), https : / / www. newyorkfed. org / medialibrary / media / research / staff _ reports / sr1063. pdf? sc _ lang = en. for a discussion of factors explaining faster real gdp growth in the u. s.

published in 1817, offered a rigorous, though less optimistic, analysis of the structure of a system of wholly free commerce. under the political onslaught of a rising industrialist class intellectually supported by the classical school, mercantilism was gradually dismantled, and economic freedom spread widely. this process reached its apex with the repeal of britain's corn laws in 1846. the acceptance of classical economics was, by then, broad enough to prompt reorganization of commercial life in most of the civilized world. * * * adam smith died in 1790, well before his extraordinary impact could have been assessed. but ricardo lived until 1823, and john stuart mill, another member of the school, lived until 1873. would they and the other early followers of smith find the current economic landscape at all familiar? in one sense, not likely. among the developed countries, famine is now virtually nonexistent. thomas robert malthus's penetrating analysis at the end of the eighteenth century of the limits of subsistence, to which many of the classical school subscribed, proved wrong. malthus built his pessimistic vision on a notion that the long - evident forces of stagnation would persist : a human population with a propensity to grow geometrically would be thwarted by limits to growth in the means of subsistence. having observed crop yields that had changed only marginally for millennia, malthus could not have foreseen the dramatic increase in agricultural yields. in the united states, for example, corn yields - or should i say maize yields - rose from 25 bushels per acre in the early 1800s to 160 by 2004. moreover, those living in the early part of the nineteenth century could not have imagined that life expectancy in developed countries two centuries later would rise on average to more than twice that which they experienced. that increase directly and indirectly resulted largely from the almost twentyfold increase in average real per capita gross domestic product gained since 1820, according to estimates of angus maddison, the economic historian. from this expanding output, society has been able to devote more resources to nutrition, sanitation, and health care. and yet, regrettably, much of today's developing world would appear familiar to our forebears. pestilence is present in the form of aids, and as a consequence, life expectancy in much of africa is not much different from what it was in most of the world two centuries ago. significant parts of the world still experience periodic famine. although workers in developed and