Investment increases demand today, which helps close the output gap and restore price stability. And it increases supply tomorrow, thus raising potential growth and allowing the equilibrium interest rate to rise. Remember also that the investment shortfall during the crisis is at the core of the recent deterioration of our potential growth rate.
3  For a fuller explanation of this point see speech by Peter Praet on “Price stability: a sinking will-o’-the-wisp?”, Washington, 16 April 2015. BIS central bankers’ speeches  3  What ultimately matters for investment, however, is not market interest rates but the cost of capital –how much long-term interest rates feed through into in firms’ and households’ cost of borrowing.