In the case of Germany, there has been an intensive discussion on whether the resulting higher real interest rate can be held (at least partly) responsible for Germany’s weak economic performance of the recent years. However, I have at least three objections to this argument. First of all, real interest rates in Germany are still low from a historical perspective.
Therefore, I do not think that they form an obstacle to a stronger economic activity. Second, it has to be noted that the relevant real interest rate is an ex ante concept. It is based on expected rather than on actual inflation.