in britain, ” the review of economics and statistics, vol. 89 ( 1 ), 118 – 133. 5 maarten goos & alan manning & anna salomons, 2009. “ job polarization in europe, ” american economic review, vol. 99 ( 2 ), 58 – 63, may. 3 / 4 bis central bankers'speeches 6 david h. autor ( 2015 ) : polanyi ’ s paradox and the shape of employment growth. federal reserve bank of kansas city : economic policy proceedings, reevaluating labor market dynamics. 2015. 129 – 177. 7 maarten goos & alan manning & anna salomons, 2014. “ explaining job polarization : routine - biased technological change and offshoring, ” american economic review, vol. 104 ( 8 ), 2509 – 26. 8 juuso vanhala ( 2008 ) : miten globalisaatio nakyy tyomarkkinoilla? bof online 5 / 2008, 27 march 2008 ( in finnish ) 9 meri obstbaum & juuso vanhala ( 2016 ) : tyomarkkinoiden polarisaatio suomessa euro & talous 12 / 2016 ( in finnish ). 4 / 4 bis central bankers'speeches

about one point the growth in our working age population. the remainder was drawn from the ever decreasing pool of available job seekers without work. that last development represents an unsustainable trend that has been produced by an inclination of households and firms to increase their spending on goods and services beyond the gains in their income from production. that propensity to spend, in turn, has been spurred by the rise in equity and home prices, which our analysis suggests can account for at least one percentage point of gdp growth over the past three years. even if this period of rapid expansion of capital gains comes to an end shortly, there remains a substantial amount in the pipeline to support outsized increases in consumption for many months into the future. of course, a dramatic contraction in equity market prices would greatly reduce this backlog of extra spending. to be sure, labor market tightness has not, as yet, put the current expansion at risk. despite the ever shrinking pool of available labor, recent readings on year - over - year increases in labor compensation have held steady or, by some measures, even eased. this seems to have resulted in part from falling inflation, which has implied that relatively modest nominal wage gains have provided healthy increases in purchasing power. also, a residual fear of job skill obsolescence, which has induced a preference for job security over wage gains, probably is still holding down wage levels. but should labor markets continue to tighten, significant increases in wages, in excess of productivity growth, will inevitably emerge, absent the unlikely repeal of the law of supply and demand. because monetary policy operates with a significant lag, we have to make judgments, not only about the current degree of balance in the economy, but about how the economy is likely to fare a year or more in the future under the current policy stance. the return of financial markets to greater stability and our growing concerns about emerging imbalances led the federal open market committee to adopt a policy position at our may meeting that contemplated a possible need for an upward adjustment of the federal funds rate in the months ahead. the issue is what policy setting has the capacity to sustain our remarkable economic expansion, now in its ninth year. this is the question the fomc will be addressing at its meeting at the end of the month. one of the important issues for the fomc as it has made such judgments in recent years has been the weight to place on asset prices. as i have already noted, history suggests that owing to the