Many critics of central banks ascribe the drop in real rates to monetary policy decisions that kept rates unusually  BIS Review 36/2010  5  low, on average, over the business cycle From my perspective, the decisions the central banks were making about their policy rates were shaped by the underlying determinants of the balance of saving and investment, including, in the past decade or so, the high saving propensities of the newly emerging Asian economies and the sluggish rebound in investment globally after the recession early last decade.
Nonetheless, it is important that we understand the reasons for the decline in average real rates and whether low rates are likely to persist – and that very tough problem is the extra credit assignment.