In addition to impressive security features to stay ahead of counterfeiting threats, these bank notes will last longer – at least two-and-a-half times longer than paper – and will therefore be more economical. These bank notes are also green. Their environmental footprint is smaller than that of the old currency made from cotton-based bank note paper.
In the euro area and other major advanced economies, productivity and population growth, which are also the drivers of potential GDP growth, have been declining for decades. The intersection point of the desired demand for “loanable funds” with the level of savings constitutes the interest rate.