baby boomers are moving out of the age ranges associated with peak labor force participation. in contrast, in the 50 years before the recession, the prime working age population grew at a rate of 1. 3 percent per year. thus a good part of the recent slowing of gdp growth is simply slower population growth. the other fundamental component of growth is the increase in real gdp per worker, which is a measure of productivity. since the end of the recession, this measure of productivity has increased at a 1. 4 percent annual rate, well below the average rate over the five decades before the recession. so a good portion of the recent slowing of gdp growth is also attributable to slower productivity growth. bis central bankers ’ speeches the remainder of the difference between pre - and post - recession growth is much smaller and is accounted for by the change in the ratio of employment to population – in other words, the combined effect of changes in unemployment and labor force participation. as the economy recovered from the great recession and real gdp growth continued to disappoint, most economists scaled back their expectations regarding future growth. in fact, one plausible scenario is for u. s. economic performance over the near term to closely resemble the average experience over the last five years – that is, real growth around 2 ¼ percent per year. a somewhat brighter scenario is looking more plausible to me now, however. in recent quarters growth has been noticeably better than the post - recession average. real gdp has increased by 2. 7 percent over the last four quarters, versus 2. 1 percent over the previous three years. payroll employment rose by an average of 246, 000 jobs per month over the 12 months ending in december, whereas it rose by an average of 185, 000 jobs per month over the previous three years. granted, we ’ ve seen short - run growth spurts before during the course of this expansion, only to see the pace of growth subside. but some recent developments that were largely absent during previous spurts have improved the likelihood that the recent pickup in growth will be sustained. i would point first to consumer behavior. household spending represents about two - thirds of gdp, and thus it is critical to headline growth. from the end of the recession to november 2013, consumer spending rose at an average annual rate of 2. 4 percent. over the 12 months ending in november 2014, however, consumer spending has expanded by 2. 8 percent. and over the six months ending in november, consumer spending has grown

present, and long - term investments cannot rely on this interest rate spanning the life of a housing loan. according to money market expectations, the interest rate will eventually stabilise around 5½ per cent. this is consistent with an inflation target of 2½ per cent and a long - term real interest rate in line with the level abroad. this interest rate, with a mark - up for banks ’ margins, provides a more realistic expression of the interest rate level that will apply over the loan ’ s life than the floating interest rate prevailing today. it may prove to be particularly challenging for borrowers to assess their debt - servicing capacity over time in a period when the interest rate is abnormally low. such a low interest rate also places particular demands on banks in assessing the creditworthiness of borrowers. but experience has shown that the underlying cause of loan defaults can be overly optimistic assessments on the part of both the lender and borrower. house prices and developments in household credit influence consumption and housing investment. we seek to take account of these indirect effects in interest - rate setting. household debt has increased sharply over the past decade. developments in debt in the 1990s may partly be interpreted as a delayed adaptation to the deregulation of the housing and credit markets in the 1980s after many households experienced financial difficulties following the relaxation. household assets and debt and housing wealth have risen at a markedly faster pace than disposable income, and housing wealth has grown more than net debt from 1994 up to the present. the norwegian economy has experienced both upturns and downturns since 1994, and activity is now approximately on a par with the level prevailing in 1994. these changes must therefore be regarded as structural changes. we have limited scope for restraining structural changes that occur when households increase their debt over several years to invest in housing and other property and assets. an interest rate that would effectively restrain these structural adjustments would also have an adverse impact on output and employment. the interest rate can be used to reduce credit demand. at present - with low interest rates abroad and a close link between domestic interest rates and the krone - a tighter monetary policy will restrain credit demand primarily because job security would be reduced. household credit demand is closely linked to developments in the housing market. home - owners who have seen the value of their dwellings rise have the possibility of taking up new mortgage - secured loans. they free up a portion of their home equity value to finance consumption and other investments. house prices in norway have