2  A technical addendum to the above might recognise that if the economy’s potential growth rate had increased, for example, as a result of faster productivity growth, then its neutral real rate of interest should be higher. This would, however, be very difficult to identify other than on a decade-by-decade basis.
It would be further complicated by the fact that, in the short run, faster productivity growth could initially show up as reduced inflationary pressures. For these reasons, it is better to stick to the simple version as outlined in the text.