4. Here is an excerpt from Bernanke's speech: In the mid-1990s, Chairman Greenspan and his FOMC...

 

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4. Here is an excerpt from Bernanke's speech: In the mid-1990s, Chairman Greenspan and his FOMC colleagues famously recognized an important structural change, an apparent increase in trend pro- ductivity growth. To quote the Chairman's speech: As a consequence of the improving trend in structural productivity growth that was apparent from 1995 forward, we at the Fed were able to be much more accommodative to the rise in economic growth than our past experiences would have deemed prudent. Discuss the above statement using AD-AS model. 4. Here is an excerpt from Bernanke's speech: In the mid-1990s, Chairman Greenspan and his FOMC colleagues famously recognized an important structural change, an apparent increase in trend pro- ductivity growth. To quote the Chairman's speech: As a consequence of the improving trend in structural productivity growth that was apparent from 1995 forward, we at the Fed were able to be much more accommodative to the rise in economic growth than our past experiences would have deemed prudent. Discuss the above statement using AD-AS model.

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Bernankes excerpt suggests that in the mid1990s there was an acknowledgment of an increase in trend productivity growth leading to a more accommodativ... View the full answer