2  BIS central bankers’ speeches  The third issue concerns the optimal policy mix for an economy undergoing medium- to longterm stagnation with a low natural rate of interest. What would be the best policy mix among monetary policy, fiscal policy, and structural reform in such a situation?
Are there any constraints to the implementation of the best policy mix, such as mounting government debts or constraints under a common currency area? What alternative mix of policies could be considered as a second best choice? IV.