BPEA | 1977 No. 1

Potential Output and Productivity

1977, No. 1

THE UNUSUAL TURMOIL in the U.S. economy during the 1970s has forced a reexamination of many of its macroeconomic characteristic inflation has been the most surprising feature of the period and the investigation of its causes and search for cures have been intense. The worsening of the relation between inflation and unemployment has been a focus of that investigation and has been linked, in part, to the very high unemployment rates experienced by younger members of the work force and to the remarkable rise in participation rates of young persons and adult women. These same developments bear on the measurement of potential gross national product, an important underpinning of both macroeconomic analysis and economic policymaking.