example and advice as colleagues. but there is more to the story than successful leadership. the success of our institution is really the result of the way all of us carry out our responsibilities. we approach every issue through a rigorous evaluation of the facts, theory, empirical analysis and relevant research. we consider a range of external and internal views ; our unique institutional structure, with a board of governors in washington and 12 reserve banks around the country, ensures that we will have a diversity of perspectives at all times. we explain our actions to the public. we listen to feedback and give serious consideration to the possibility that we might be getting something wrong. there is great value in having thoughtful, well - informed critics. while the challenges we face are always evolving, the fed ’ s approach will remain the same. today, the global economy is recovering strongly for the first time in a decade. we are in the process of gradually normalizing both interest rate policy and our balance sheet with a view to extending the recovery and sustaining the pursuit of our objectives. we will also preserve the essential gains in financial regulation while seeking to ensure that our policies are as efficient as possible. we will remain alert to any developing risks to financial stability. 1 / 2 bis central bankers'speeches i am deeply grateful for the opportunity to lead the fed as we face these evolving challenges. i believe that the way we approach our work, the strong values we hold, and the dedication to public service i see throughout the federal reserve have been the keys to our success. as chairman, i will uphold these values and do my very best to further our pursuit of something we all seek — an economy that works for all americans. 1 on monday, february 5, 2018, jerome powell officially took the oath of office as chairman of the board of governors of the federal reserve system ( for more information, see the board ’ s press release available at www. federalreserve. gov / newsevents / pressreleases / other20180205a. htm ). this february 13 event is a ceremonial swearing - in. 2 / 2 bis central bankers'speeches

, the largest productivity gains were not realized in the high - tech sector or from the it investments itself but from the widespread use of information and communication technologies in traditional sectors like wholesale trade, financial intermediation and construction. the new technologies led to a complete reorganization of the value chain thereby enhancing total factor productivity, albeit with a lag. one cannot entirely exclude that this leverage effect will simply occur with a lag in europe. after all, productivity growth is one of the least well understood phenomena in economics. while i do not want to exclude a productivity lag effect in favour of europe, i suspect the story is a more complicated and a more challenging one. structural conditions must be in place in europe to allow maximum flexibility so that the full potential of the new technologies can be unleashed throughout the real economy. conclusions the question of why the eu recovery is so slow implies a cyclical answer. the european track record of the last ten years, however, strongly suggests that there is a crucial structural dimension to the problem of weak european growth. the real challenge for the eu is to boost productivity growth and augment its potential growth rate. in the words of mervyn king : “ raising productivity growth is the key to improving the prosperity of future generations. ” 4 it is therefore not particularly meaningful to analyze the growth weakness in europe in purely cyclical terms. in other words, expanding fiscal and monetary policy will be no panacea to europe ’ s growth challenge. longer - term fiscal consolidation is imperative in light of a rapidly aging european population. on the monetary side, there is no indication that policy is too restrictive in light of real interest rates at or near zero for the eurozone. indeed, based on a standard taylor rule framework, the ecb ’ s monetary policy stance is equally or in the recent past even more expansionary than that of the federal reserve. at any rate, neither fiscal nor monetary policy can ultimately address structural impediments to higher growth dynamics in the euro area. in an effort to augment the eu ’ s growth potential, the focus must therefore be on breaking down labour market rigidities for additional labour input on the one hand and on accompanying policy measures to increase productivity on the other hand. despite the subdued nature of the current growth outlook which is adversely affected by a strong euro and rising oil prices, there are some promising signs that structural change is under way. both the gradual dismantling of the 35 hour week in france and the shift to part -