THEME: INFLATION/INTEREST RATES
Here is an interesting view from Anirvan Banerji...

Most sceptics of the productivity boom acknowledge that technology has increased worker productivity, "the question is, how much?" said Anirvan Banerji, director of research at the Economic Cycle Research Institute.

One hole in the productivity growth story, as oft-noted by Stephen Roach, the chief economist at Morgan Stanley, is that the government's method of determining productivity is not accurate. For example, Mr Roach notes, the labour department says the average working week in the financial services industry has remained unchanged at 35.5 hours since 1988. It's hard to imagine anyone on Wall Street working a 35 hour week.

Supporters of the productivity miracle combat that the methodology has always been imprecise. Keep it simple, the argument goes: We have surging GDP growth with benign inflation and low interest rates - a big factor contributing to that is the productivity miracle.

Mr Banerji takes exception with this notion. His Economic Cycle Research Institute cross-references mountains of economic data from the US and around the world to divine the nature of the economic cycle. He raises a simple question that casts doubt on how large a role the productivity miracle played in the 1990s boom. "If we had strong growth and subdued inflation in the 1990s because of productivity, why did the Fed need to raise rates in 1999?"

While productivity may explain part of the gains, Mr Banerji believes something else was going on: rising import prices.

Inflation was largely kept in check during the 1990s because of the rolling nature of recessions around the globe over the course of the decade.

According to the Institute's research, the only two points during the 1990s when all leading economies were in expansion mode - what the Institute calls "a synchronous global expansion" - were 1994 and 1999. In both instances, import prices started rising and the Fed was forced to raise rates. Mr Banerji notes that with Germany and Japan emerging from recessions, the major global economies are just about at the point of another synchronous global expansion.