and intensive attempt to include the factors that affect the increase in productivity, within the framework of economic models, in what is known as “ the new theory of economic growth. ” the results of this new theory of economic growth are spelled out at length in an excellent book that my friend, professor elhanan helpman, published in 2004 under the title the mystery of economic growth. allow me to present several of the main findings in capsule form : 1. international comparison shows that the main result of solow ’ s work is correct. there is evidence that the differences in total productivity among countries - differences that originate in different levels of technology - explain more than 60 percent of the differences among these countries in per - worker income and growth rates. 2. although growth has its ups and downs in the course of the economic cycle, the average growth rate of the global economy has been accelerating over time. by inference, the rate of increase in technological level in global economies has also been accelerating over time. 3. education plays an important role in explaining the differences in growth rates and per - worker income from country to country and over time. 4. one important result : society earns a much higher return on an investment in research and development than the investor earns. allow me to insert a parenthetical remark. there is a substantial difference between the marginal improvement of existing technologies and the development of new technologies that can serve many purposes - what we call multipurpose technologies. these are general - purpose technologies - such as mechanization, electrification, and computerization - from which other technologies derive many uses. the contribution of these technologies to productivity is large and long - lasting. however, it can take many years for an economy to assimilate multipurpose technologies. furthermore, at the beginning of the process the rate of productivity growth in a given economy may even decline as the new technology crowds out antiquated technologies. fifteen years ago, this led robert solow to postulate that the computer revolution is taking place in every part of the economy except for the productivity data. this situation, however, began to change in the middle of the 1990s. 5. economists emphasize the importance of the openness of an economy for its growth rate. there is no economy in the world, in the modern era, that has managed to grow rapidly over a lengthy period without increasing its exports and its imports steeply. and on the technology side, countries have become interdependent due to the crossing of

svante oberg : the economic situation speech by mr svante oberg, first deputy governor of the sveriges riksbank, to the vasterbotten chamber of commerce, umea, 25 august 2011. * * * my message today can be summarised in four points : developments have been dramatic over the summer. however, statistics for the swedish economy received during the summer have been in line with the forecasts made in july. the turbulence on the financial markets has nevertheless increased uncertainty over future developments. we will discuss how this may affect monetary policy in september. it is now the fourth year in a row that i have held a speech on the current economic situation in the month of august. normally, i give an account of the most recent forecasts from the latest monetary policy decision in late june / early july and of the statistics received since then. this year it seems justified to give just a brief account of the forecasts made before the summer holidays and of the new statistics and to instead discuss events during the summer and what future consequences they might have. i shall therefore begin with a brief background, and then move on to discuss in more detail the turbulent developments in the financial markets during the summer, concluding with a few words about the problems i believe we will face at the next monetary policy meeting. july monetary policy report continued recovery in the world economy as a whole … we pointed out in the july monetary policy report that growth in the world as a whole was good. the forecast was that gdp growth in the coming years would be just over 4 per cent a year, which is higher than the historical average. the emerging economies, including the bric countries ( brazil, russia, india and china ), acted as motor ( see figure 1 ). we also noted that inflation was relatively high in many countries, but that energy and commodity prices in the world market, which rose substantially last year and had pushed up inflation, had levelled off or fallen slightly this year ( see figure 2 ). … but the recovery in the united states and euro area is sluggish however, the international outlook was divided. the recovery in the united states and the euro area was expected to be slow ( see figure 3 ). gdp growth in the united states was expected to be just over 2 per cent this year and to only gradually return to more normal levels of around 3 per cent. unemployment had fallen only marginally from the peak levels noted in the most acute phase of the financial crisis