eu is deepening. the countries in eastern and central europe who greenwood & krusell have moved away from planned economies have many years of rapid development ahead of them before they reach levels corresponding to those in western europe. china, india and other emerging economies will continue to grow strongly and to account for an increasing share of the world economy. the international competition in the product and labour markets and the international financial integration process will thus continue to increase during the foreseeable future. the deregulation of several markets during the 1990s has probably largely already made its impact on productivity. i interpret the sns report published at the beginning of the year to say that the most likely development is that this factor will contribute less to the rate of increase in productivity during coming years. 7 at the same time, there is still relatively large scope for continued reforms in this field. a survey indicates that around 32 per cent of consumption was exposed to competition at the turn of the millennium. this figure for sweden can be compared with the figure for the eu of around 45 per cent. 8 a similar picture is shown in a report by the swedish competition authority. 9 this states that around half of the higher prices compared with the oecd arise from a lack of competition in sweden. it will probably fuel productivity for a long time. it takes time for companies to adjust to the new circumstances. this can be illustrated by means of a historical comparison. it is just like electricity a technique for general use. the advent of electricity had no noticeable effect on productivity until companies literally rebuilt their factories. because this cost both time and money, it took a while before these changes were implemented. 10 conclusion – most indications point towards a slowdown historical averages are usually a fairly good starting point for forecasts of future developments, particularly in the slightly longer term. but in the case of productivity, history gives us different answers. the reason for this is that the trend in productivity growth has varied so substantially over time. the average increase in productivity growth in the business sector was around 4 per cent a year during the past five years, but only around 3 per cent a year if one instead looks at the past fifteen years. if one goes further back in time, one can find both higher and lower rates of increase. during the 1960s the rate of increase was around 6 per cent a year and during the 1980s it was only 2 per cent a year. it is thus not history giving us the answers, but the two parts i mentioned just now

states, can be seen in us studies. 4 another possibility to improve the accounting is to look more closely at the link between labour and capital. so far the analysis has been based on the two resources in production being dealt with separately. but there are good examples of when labour and capital are interdependent. technical knowledge becomes particularly valuable with regard to the development of programs and systems, the production of computer games, etc. artists, film stars, elite athletes / sportsmen and others active in the experience industry get more out of their special skills through the developments in it and communications. the us central bank governor ben bernanke uses the company walmart as another example. 5 for the purpose of using the it investments the company had made, they reorganised their work, gave the staff further training and changed the relationship to their suppliers. this type of technique for general use, of which it can be said to be an example, can in turn push up other investment, such as further education. there are also other ways of developing the analysis. for instance, there are studies based on general equilibrium models indicating that the contribution of capital to productivity growth is forsling & lindstrom see, for example, stiroh ( 2001 ) and jorgenson et al ( 2006 ). bernanke underestimated in growth accounting. 6 if we avoid such underestimations the residual item declines. our knowledge has increased. and it is important for us at the riksbank to increase our knowledge of the development of productivity and of what might explain it. one of the current projects at the riksbank aims to obtain greater knowledge of how it investment, reorganisation and further education together affect productivity. better statistics lead to better analysis i would like to conclude this section with a few words on the considerable significance of economic statistics for being able to analyse productivity and the driving factors behind it. the previous us central bank governor, alan greenspan, was famous for his ability to take in large volumes of statistics. he became legendary when in the mid - 1990s he was the first to predict that productivity growth in the united states would strengthen as a result of increased use of it. this led to the central bank being able to conduct a more expansionary monetary policy for a period, without inflation rising. a few years ago i carried out an examination of economic statistics. my conclusions then were that these needed to be improved in four areas. all of them had in common that they were important to