(Currently the U.S. economy is operating below its production capacity and the Fed has pledged to continue an expansionary monetary policy until the economy reaches its production capacity. Consider two scenarios about the productivity trends in the US economy in the next several years: (1) Continuation of productivity trend observed in the past decade (2010s); or (2) An enhanced productivity growth compared to the 2010s, as argued in the article. If the Fed maintains its current pledge and policy, under which of the two scenarios will it start tightening monetary policy earlier? Why? [6]

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