the voting frequencies in these groups determined in such a way as to ensure that, at any time, the euro area economy is adequately represented by those governors having the right to vote. the first group will be composed of the five largest countries ; germany, france, italy, spain and, in time, if it joins the euro area, the uk, will all be members of this group. ireland will be in the second group, along with countries such as the netherlands, belgium, austria, finland, greece, portugal and some of the larger accession countries. the remaining accession countries will all be in the third group. but all governors, whatever their voting rights, will continue to attend meetings of the governing council and to participate fully in its discussions. what is more, should voting prove to be necessary – and it has not played a significant role in the governing council to date – each vote will carry exactly the same weight. prospects a year ago interest rates are, of course, the main focus of attention – and rightly so, given the ecb ’ s primary objective of maintaining price stability. while a decision was taken in late 2001 to reserve the first meeting of the month for monetary policy discussions, such issues are never far from the thoughts of governors. indeed, we are currently engaged in a review of the monetary policy strategy, which has been in place since the start of emu. as you are aware, the strategy is currently based on two pillars, namely money supply growth vis - a - vis a reference value and a broad range of non - monetary indicators geared to predict the medium - term outlook for inflation. after four years of operating the present strategy, it makes sense to take stock of our experience so far and to reflect on its various elements. but the fact that a review is being held does not in itself necessarily imply any significant change in the strategy. a year ago, the background to monetary policy was – somewhat depressingly – not dissimilar to that obtaining at present. the general expectation was that there would be a gradual recovery of euro area economic activity over the course of 2002. taking the year as a whole, while growth was projected to be modest – of the order of 1. 2 per cent - the euro area economy was expected to attain its trend rate of growth by the end of the year. the view was that domestic demand should benefit from a number of influences ; the absence of fundamental economic imbalances that would require a lengthy corrective process, the

by the growth rate. when labor productivity was growing at 3 - 1 / 4 percent per year — during the 25 years from 1948 to 1973 — it took 22 years for labor productivity to double. looking again at figure 1, in the 42 years from 1974 to 2016, when labor productivity was growing on average at a rate of 1 - 3 / 4 percent, it would have taken approximately 41 years for labor productivity to double. there is a vast difference between the prospects facing the young in an economy where incomes per capita are doubling every 22 years and an economy in which incomes are on average doubling only every 41 years. now, productivity statistics are imperfect in many respects — for example, capturing the value of the seemingly free apps we use on our smartphones is challenging. and many of us who live in the modern age cannot believe that the iphone has not fundamentally changed our lives. it has certainly changed our lives to some extent, and there is likely some underestimation of productivity growth in the official data. but to figure out whether the current degree of data bias has reduced estimated growth, we have to ask not whether there is bias, but whether the bias has increased. to a first approximation, one could assume that the rate of bias is constant, and does not account for the estimated decline in productivity growth and that we should not dismiss the slowdown as an artifact of measurement difficulties. 2 that is the conclusion most researchers reach, but the data issue is not settled. as bob solow famously said, just before the increase in productivity growth of 1996 – 2003, “ the computer is everywhere except in the growth data. ” and there are serious researchers who have made serious arguments that we will soon be seeing more rapid growth in the productivity data. factors determining productivity growth clearly, a key question for economic forecasters, and even more so for u. s. citizens, and indeed for the entire global economy, is whether we should anticipate a return of the more rapid productivity gains experienced in the it boom and for the quarter century after the end of world war ii, or should instead resign ourselves to tepid economic growth in future years. and a central policy issue is whether government policies can help push the economy toward a higherproductivity regime. in this context, it is useful to think of labor productivity growth as coming from three sources, as shown in figure 2. first, greater investment by firms in tangible equipment and structures, as well as “ intangible ” investments such