Perspectives On Productivity And Potential Output Growth

Held in Enghien, France, on 25-26 April 2006, this joint workshop brought together researchers to quantify and better understand differences in productivity and potential output growth among industrialized countries. The workshop was attended by some 30 economists, mainly from central banks. In this short summary of the proceedings, the authors highlight the findings around the three main themes. Central banks are keenly interested in productivity and potential output for a number of reasons. Productivity directly affects firms' marginal cost of production, which is a key driver of prices. Productivity is also a key determinant of potential output, and short-run deviations of actual output from potential output, known as the output gap, are a useful indicator of future inflationary pressures.