According to this evidence, declining potential growth together with a relative scarcity of safe assets to absorb global savings have led to a declining natural interest rate – that is: the rate consistent with full resource utilisation and steady inflation rates around the central bank objective over a longer-term perspective.
In the context of such decline of the natural rate and the continued cyclical weakness, the necessary degree of monetary policy accommodation implies a constellation of very low interest rates for an extended period of time.