but not so much for core services inflation, with housing developments helping to account for the differences in services inflation. other cross - country research suggests that wage developments help explain services inflation dynamics. 14 indeed, services inflation from both the united states and the euro area have been elevated. still, while u. s. housing services inflation has been running higher than the wage - driven nonhousing component, the reverse is true in the euro area. while the cross - country differences during the recent bout of high inflation have emerged more prominently during the disinflationary period, economic growth has been very heterogenous since the onset of the covid - 19 pandemic. generally speaking, the u. s. has experienced a significantly stronger recovery than other advanced economies. as we can see in the left panel on slide 6, real gdp has grown substantially more in the united states since 2021. this is also the case with respect to the larger components of gdp, such as consumption and investment, shown in the right two panels. in explaining why the u. s. has managed to bring down inflation and experience strong economic activity, i believe that the combination of restrictive monetary policy see maria aristizabal - ramirez, dylan moore, and eva van leemput ( forthcoming ), “ what goes up together must not come down together : an analysis of services disinflation, ” forthcoming as an international finance discussion paper ( washington : board of governors of the federal reserve system ). see pongpitch amatyakul, deniz igan, and marco jacopo lombardi ( 2024 ), “ sectoral price dynamics in the last mile of post - covid - 19 disinflation, ” bis quarterly review, march, pp. 45 – 57. - 9together with convex supply curves can help explain these developments. 15 in addition, there are three supply - related factors that have also made significant contributions to the combination of rapid disinflation together with continued and resilient growth. first, there are important factors that have affected total factor productivity differently across countries. for instance, the u. s. has seen greater business dynamism, as reflected in a higher rate of new business formation, shown in the left panel on slide 7. this is important because while most new firms fail, a small share of those that survive grow rapidly and make significant contributions to aggregate productivity. 16 moreover, the pandemic - era business creation

surge has been particularly strong in high - tech sectors, such as computer systems design as well as research and development services. 17 in fact, we have also seen greater growth in total factor productivity in the u. s. relative to other advanced economies, as shown in the right figure on slide 7. in addition, while the artificial intelligence ( ai ) technology is still in its nascency, u. s. businesses across different sectors of the economy are investing in and adopting ai. according to the business trends and outlook survey of the census, more than 20 percent of companies in 15 sectors have adopted ai. 18 it may be too early to tell, but additional productivity see adriana d. kugler ( 2024 ), “ disinflation without a rise in unemployment? what is different this time around, ” speech delivered at the 2024 stanford institute for economic policy research economic summit, stanford university, stanford, calif., march 1, https : / / www. federalreserve. gov / newsevents / speech / kugler20240301a. htm. see titan alon, david berger, robert dent, and benjamin pugsley ( 2018 ), “ older and slower : the startup deficit's lasting effects on aggregate productivity growth, ” journal of monetary economics, vol. 93 ( january ), pp. 68 – 85 ; and ryan decker, john haltiwanger, ron jarmin, and javier miranda ( 2014 ), “ the role of entrepreneurship in u. s. job creation and economic dynamism, ” journal of economic perspectives, vol. 28 ( summer ), pp. 3 – 24. see ryan decker and john haltiwanger ( 2024 ), “ high tech business entry in the pandemic era, ” feds notes ( washington : board of governors of the federal reserve system, april 19 ), https : / / www. federalreserve. gov / econres / notes / feds - notes / high - tech - business - entry - in - the - pandemic - era20240419. html. in data released september 23, 2024, the share of firms reporting the use of ai to perform tasks previously done by employees in producing goods or services was 27 percent. - 10 gains may be coming from tasks that are enhanced by ai through process improvements. 19 second, we have seen a stronger rate of labor productivity growth in the united states