This is important given the higher levels of risk intrinsic to a small highly globalised economy. It also allows the system to withstand both unexpected negative developments and the ebb and flow of financing conditions. Conclusion To conclude, the wide range of possible future paths means building resilience is not only desirable, it is necessary.
7 Although the reasons for the declines in neutral rates are not perfectly understood and may differ across countries, there are some common drivers, such as slower productivity and labor force growth and a heightened sensitivity to risk. 8 The very low levels of the shorter run neutral rate reflect in part headwinds from the crisis that are likely to dissipate over time.