An economic adviser at the Federal Reserve Bank of San Francisco known for his research into productivity trends published an analysis Monday that left open the possibility that a recent surge in productivity may not necessarily fade as it so often has in the past. John Fernald, economist emeritus at the San Francisco Fed and a professor at INSEAD in Fountainebleau, France, has long been cautious about extrapolating from short-term trends to conclude that the U.S. is entering a new period of breakout productivity growth like that from 1995 to 2004, which enabled big economic gains without inflation. Some Fed policymakers and analysts have expressed the hope that generative artificial intelligence and other innovations may already be setting the nation up for such a period, which lays the groundwork for improvements in living standards.
