[25] At the same time, to avoid that the effective lower bound constrains monetary policy too frequently – and thus to reduce the need for unconventional policy tools – it is essential that inflation is centred at its target over the medium term, so that the limitations imposed by a low equilibrium real rate are not further compounded by an inflation trend that is also too low.
In relation to other policy dimensions, a low equilibrium real rate reflects – as I discussed earlier – low expected potential growth rates. It follows that growth-enhancing structural policies and growth-optimising public investment rates would translate into an upward shift in the equilibrium real rate.