For example, strong low-inflationary growth boosts share prices, which boost investment and hence productivity.

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Further, it is in industries in which technology is rapidly changing that the impact of regulation on new start-ups, and hence on productivity growth, may be more significant than for the economy as a whole.

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They improved technology, upgraded systems and hence gained in productivity and competitiveness.

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In turn, as workers move into more productive areas, this gives a boost to overall productivity and hence living standards.

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But with accelerating productivity, and hence a rising speed limit, such a framework for analysing the economy poses problems.

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America's slowdown has not shaken investors' belief that, over the longer term, America will offer faster productivity growth and hence higher rates of return than Europe.

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It is unlikely that the doubling of American share prices over the past three years is fully justified by faster productivity growth and hence higher future profits.

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To the extent that many of Europe's new jobs are for lower-paid (and hence lower-skilled) workers, this trend may, at least in the short term, dampen labour productivity growth.

ECONOMIST: European economies