tyra levels of productivity will show through in higher potentials and actual output for the economy. it need not necessarily, because of lower input. technology advances could lead to more hiring and expansion or laborsaving activity. the relative importance of these factors also has consequences for our assessment of the degree to which resources lack exists in the economy. since a higher level of productivity implies a higher path for potential output, this would imply that the recent surges in gdp increased both actual and potential, and consequently no progress on resource closing would be implied by this, if that were the case. this is a stunning implications if that were true. in contrast, some are skeptical that the economy is even operating far below sustainable levels. they might argue that much of the drop in output during the recession is the result of the permanent reduction in the economy's productive capacity perhaps because certain financial market practices that had enabled additional investment have now been discredited. according to this view, the straw productivity