##allist, but a non - metallist. ” wicksell then proceeds to suggest a reaction function for the central bank : according to our line of approach, they [ proposals for stabilizing the value of money ] can attain their objective only in so far as they exert an indirect influence on the money rate of interest, and bring it into line with the natural rate... ( p. 188 ) but this does not mean that the [ central ] banks ought actually to ascertain the natural rate before fixing their own rates of interest.... the procedure should rather be simply as follows : so long as prices remain unaltered, the banks ’ rate of interest is to remain unaltered. if prices rise, the rate of interest is to be raised.... and likewise mutatis mutandis if the price level falls. ( p. 189 ) to make this possible, wicksell suggests the suspension of the free coinage of gold, as a “ first step towards the introduction of an ideal standard of value ” – ” an international paper standard ” ( p. 193 ). and, on a soaring personal note at the end of the formal text of the book ( p. 196 ), he writes the question of monetary reform on international lines definitely remains among the most important of economic problems. that its realization depends on international co - operation... is to my mind a positive recommendation. i joyfully welcome every fresh step towards the uniting of nations for economic or scientific ends, for it adds one more safeguard for the preservation and strengthening of that good on which the successful attainment of all other goods, both material and immaterial, ultimately depends – international peace. if this were a paper about wicksell, there would be no choice but to stop after this inspiring crescendo. but although wicksell plays a key role in this paper, the paper is not primarily about him. let me nonetheless conclude this section of the paper with a few additional comments. 7. wicksell ’ s explanation of price dynamics. ( continuation of # 1 above ) now let us suppose that for some reason or other commodity prices rise while the stock of money remains unchanged, or that the stock of money is diminished while prices remain temporarily unchanged. the cash balances will gradually appear to be too small in relation to the new level of prices.... i therefore seek to enlarge my balance. this can only be done

only 1 / 2 percent per year since 2010 – the slowest five - year growth rate since world war ii and about one - fourth of the average postwar rate ( figure 2 ). for further perspective, productivity growth averaged bis central bankers ’ speeches 1 - 1 / 2 percent during the so - called slow productivity period from 1974 to 1995 and 3 percent during the tech - boom decade from 1995 to 2005. the slowdown has been worldwide and is evident even in countries that were little affected by the crisis ( figure 3 ). given the global nature of the phenomenon, changes in factors specific to the united states are probably not the main drivers. one factor holding back productivity in recent years has been the meager growth in the business sector ’ s capital stock ( figure 4 ). this weakness is consistent with the weak recovery in demand. 4 another important factor is the marked decline in total factor productivity ( tfp ) growth ( figure 5 ). tfp is that part of productivity that is not explained by capital investment or labor quality ; it is thought to be mainly a function of technological innovation. 5 a broad decline in the dynamism in our economy may also be contributing to lower tfp. 6 there is strong evidence that the slowdown in tfp growth in the united states preceded the financial crisis, particularly in sectors that produce or use information technologies. 7 the range of opinions on the future path of productivity growth is wide, and the historical record provides ample grounds for humility. 8 a middle - ground position that seems to underlie many current forecasts is that productivity is probably still being held down by cyclical factors and lingering effects of the crisis. as those factors dissipate, labor productivity growth should move up to 1 - 1 / 2 percent or so, the lower end of its longer - run range. in addition to productivity, the other principal factor in potential output is labor supply, which is determined by the working - age population, the natural rate of unemployment, and the trend labor force participation rate. both the natural rate of unemployment and labor force participation initially appeared to suffer crisis - related damage. but more recent data are a bit more encouraging. the natural rate of unemployment reflects the matching of characteristics that employers are seeking with those of the unemployed. with the dramatic labor market dislocations of the crisis, it was not surprising to see measures of matching efficiency deteriorate, and many see eugenio pinto and stacey tevlin ( 2014 ), “ perspectives on the