The Bank of Canada’s Senior Deputy Governor, Carolyn Wilkins, gave a speech last year in which she outlined why we should expect to see a lower real neutral interest rate globally. The reasons include slowing labour force growth and productivity growth in developed economies, suggesting a drop in demand for investment, and a very strong supply of savings from many emerging economies.
Also in Europe, there remains more to do on most of these areas, we need to continue to address similar issue in order to boost the growth potential. Our discussion has highlighted the crucial role of institution building for successful integration, both in Europe and Africa.