Slide 3 Ageing society and lower productivity growth weighing on real equilibrium rate  https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp201124~bcaebee7c0.en.html  2/13  24/11/2020  COVID-19 and monetary policy: Reinforcing prevailing challenges  The parallel decline in trend productivity growth since the 1970s is likely to have added to price stagnation. Higher output per hour is a necessary precondition for higher sustainable wages, incomes and, ultimately, prices.
The same forces that are weighing on inflation have also contributed to the decline in the real natural rate of interest – the rate that balances savings and investment without exerting pressure on prices (see right chart slide 3).