The evolution of longer-run growth also has implications for the longer-term real interest rate, which is largely determined by the growth in per capita consumption and the growth rate in population. In turn, the growth in per capita consumption depends on productivity gains and the share of the population engaged in production.
The implications of these factors on the real interest rate is, of course, relevant for central bankers as they seek to set a policy rate to stabilize prices and promote sustainable growth. Yet, it is important to note that monetary policy is not capable of reversing or mitigating such secular slowdowns.