Moreover, there are downside risks to the foreign outlook. 9  Laubach and Williams define the natural rate as "the real short-term interest rate consistent with the economy operating at its full potential once transitory shocks to aggregate supply or demand have abated" (2015, p. 2). 10  See, for example, chapter 1 of the IMF World Economic Outlook (2015).
BIS central bankers’ speeches  3  Other factors likely pushing down the current neutral rate may prove even more persistent. Importantly, expectations that the economy's growth potential has fallen could contribute to a persistent decline in the neutral rate. Indeed, there is evidence that growth in the labor force, and perhaps productivity, have slowed persistently in recent years.