Moreover, one research study shows that large-scale fiscal policies will put upward pressure on the natural rate of interest.9 That said, in the short run, the negative shocks to aggregate demand caused by COVID-19 may outweigh those to aggregate supply, and households and firms may become cautious with their consumption and investment activities because of high uncertainties over 6  As for explanation of the natural rate of interest, see Wakatabe, M., "Japan's Economy and Monetary Policy," speech at a meeting with business leaders in Aomori, June 27, 2019, https://www.boj.or.jp/en/announcements/press/koen_2019/ko190627a.htm/.
7 A research paper examined the major European countries that experienced 19 pandemic events -since the Black Death in the 14th century through the Hong Kong flu after WWII -- where more than 100,000 people died.