With very low inflation even otherwise favourable supply shocks, like the effects of increased supply on fuel prices, may not be an unmixed blessing.
12  By emphasizing “longer-run equilibrium” interest rates, I am excluding monetary policy (which is unlikely to have major effects on the equilibrium real interest rate), and thereby also relating to concerns about monetary policy being the only game in town. -9Over the years, many economists--some of them textbook authors--have noted that expansionary fiscal policy could raise equilibrium interest rates.