largely a legacy of the financial crisis, which, among other things, caused investment spending in many advanced economies to fall to very low levels. see lowe p ( 2013 ), “ productivity and infrastructure ”, speech to the iariw - unsw conference on productivity measurement, drivers and trends, sydney, 26 november. this is true of both labour productivity and multifactor productivity growth. bis central bankers ’ speeches graph 8 another line of thought is that the slowdown is much more structural in nature. a prominent advocate of this view is professor robert gordon from northwestern university. he argues that the first three - quarters of the 20th century was a golden period in terms of productivity growth for the advanced economies. during that period, we worked out how to take full advantage of the transformational inventions of electricity and the internal combustion engine that occurred at the end of the 19th century. 4 while there have been many breakthroughs over recent years, gordon argues that they pale into insignificance compared with the huge advances made possible by these iconic inventions at the end of the 19th century. another sombre assessment is offered by nobel laureate edmund phelps. he argues that the problem is not so much that we have run out of really great things to invent, but that western societies are now less able to invent them. he argues that cultural changes, including the changed role of government, have stifled the desire and incentives for innovation. as a result, our economies have become less dynamic and less likely to find, develop and make use of the major technological breakthroughs that are the source of much productivity growth. 5 as is usual in economics though, there is a counterview and it is much more optimistic. this view is that the so - called techno - pessimists are fundamentally wrong and, rather than facing a future of much slower technical progress, we are on the cusp of a new era of great progress in science. a prominent advocate of this view is robert gordon ’ s colleague at northwestern university, joel mokyr, who argues that the technological advances of recent times have given scientists a dazzling new range of tools and instruments. these advances have also greatly lowered the cost of accessing information. his argument is that, as a result, a new age of great scientific advancement is now possible. 6 see gordon rj ( 2012 ), “ is us economic growth over? faltering innovation confronts the six headwinds ”, nber working paper no 18315, august. available

the eurosystem was two percentage points. 14. changes in over - the - counter ( otc ) derivatives regulations, leading to requirements for central clearing, and margin requirements for uncleared derivatives, have also driven increased demand for hqla. 15. see also acharya, v. v. et al. ( 2022 ), “ liquidity dependence : why shrinking central bank balance sheets is an uphill task ”, paper presented at the federal reserve bank of kansas city ’ s jackson hole economic symposium, august. 16. for the role of deposits in reserve demand, see lopez - salido, d. and vissing - jorgensen. a. ( 2023 ), “ reserve demand, interest rate control, and quantitative tightening ”, mimeo. 17. see board of governors of the federal reserve system ( 2019 ), “ statement regarding monetary policy implementation and balance sheet normalization ”, 30 january ; and zobel, p. ( 2022 ), “ the ample reserves framework and balance sheet reduction : perspective from the open market desk ”, remarks at the cato institute ’ s 40th annual monetary conference, 8 september. 18. this spread compensates banks for the overhead and balance sheet costs of liquidity storage services but may also include an excess spread reflecting the pricing power that banks enjoy because of their exclusive access to the central bank balance sheet. 19. the federal reserve also has liquidity backstop facilities – the discount window facility and the standing repo facility – which are priced above the market rate to prevent sudden rate spikes arising from demand - supply mismatches for which the chosen buffer may prove to be insufficient. 20. for the role of reserves in contributing to financial stability, see greenwood et al. ( 2016 ), “ the federal reserve ’ s balance sheet as a financial - stability tool ”, prepared for the federal reserve bank of kansas city ’ s 2016 economic policy symposium, jackson hole. 21. schnabel, i. ( 2023 ), “ monetary policy tightening and the green transition ”, speech at the international symposium on central bank independence, sveriges riksbank, stockholm, 10 january. 22. see, for example, cavallo, m. et al. ( 2019 ), “ fiscal implications of the federal reserve's balance sheet normalization ”, international journal of central banking, issue 61, pp. 255 - 306. 23. see article 119 ( 2 ) and article 127 ( 1 ) of