They are leading to: lower interest rates an economic system that is less prone to inflation, at least for an extended period lower estimates of the unemployment rate associated with full employment the old signposts being less reliable than they once were. If you accept this diagnosis, the obvious question is how do we respond? I would like to make two points here.
The first is that the paper by Alan Taylor and Oscar Jorda at this symposium points us in the right direction. Any individual country’s interest rates are partly determined by global factors that are difficult to resist and often difficult to predict. This means that we need to pay close attention to these global factors in our decision-making.