Graph 1  Unemployment Rate* %  %  10  10 May 2020 SMP forecast  8  8  6  6 Actual**  4  4  2  2  0  1967 * **  1981  1995  2009  0 2023  Shaded areas represent rough dates of previous labour market downturns.
I think that the concept of the natural rate of interest is of importance for modern monetary theory and that it is proving to be very useful in organising one’s thoughts about the working of the economy and the effects of monetary policy.