Fischer said there is disagreement about what spending policies are the most effective but "some combination of improved public infrastructure, better education, more encouragement for private investment, and more effective regulation all likely have a role to play in promoting faster growth of productivity and living standards." Although details remain unclear, Trump's economic plan includes the pledge for a massive infrastructure spending program, which he believes will create jobs. Like Fed Chair Janet Yellen in her testimony in Congress last week, Fischer said fiscal policies that improve productivity can help address some of the disappointing aspects of the current recovery. Productivity growth in the past decade has been half the rate of the long-run trend of 2.5 percent, and if this slow pace continues it "would have wide-ranging consequences for living standards, wage growth, and economic policy more broadly," Fischer said. Weak demand and slow investment, including in the oil sector, may be factors in the slow productivity growth, he said, which in turn is keeping rates low.

Source: The Nation Bangkok November 21, 2016 14:19 UTC