Global real interest rate and Swedish real interest rates from a historical perspective 3(a ) Global real interest ra te  3(b) Swedish real interest rates  6  10  Real interest rate, 2 years Real interest rate, 5 years Real interest rate, 10 years  Global real interest rate, 10 years, weighted average (GDP)  8  5  6  4  4 3  2 2  0  1  -2  0  -4  87  91  95  99  03  07  11  15  87  91  95  99  03  07  11  15  Note. Per cent. The broken trend line has been calculated using the HP filter. Real i nterest ra tes a re ca l culated as nominal government bond yi elds minus actual i nflation. The calculation of the global rea l interest ra tes includes the euro a rea (as of 1995), Ja pan, Ca nada, the United Ki ngdom and the Uni ted States. Sources: Bureau of Economic Analysis, Eurostat, Japanese Statistics Bureau, Ma crobond, OECD, Offi ce for National Statistics, Statistics Sweden and Statistics Ca nada  Falling global real interest rates can be caused by secular stagnation... Research provides several different explanations for the falling trend in global real interest rates.3 The explanation that has probably received the most attention recently is the theory of secular stagnation, developed by the American economist Lawrence Summers.
Even though, in the past, the ECB didn’t seem too shy about going into such detail? There is a European tradition – different in this respect from, say, the U.S. – of central bankers being more outspoken, when they feel it can be useful. At the ECB, we feel it is legitimate to speak our mind and explain what is needed to make the euro work better. But what we can’t and shouldn’t do is go into the detail of what should be government policy. Mario Draghi, in his last press conference, described the concept of “helicopter money” – the idea that the central bank could finance economic agents directly – as “very interesting”. Is that something the ECB is debating? BIS central bankers’ speeches  1  No. As an economist, of course I find the academic discussion exciting. It is good that academics force us to think outside the box. But as a policymaker, as interesting as it may be, helicopter money is not currently part of the discussion in the Governing Council. If we decided to get into that discussion, we would have to deal with many questions, such as: how exactly would it work in practice? How would “helicopter money” fit within our monetary policy? And finally and most importantly, how do we make sure it doesn’t cross the line between monetary and fiscal policy? To be honest, I don’t see how it could work without some kind of risk-sharing with governments, which could be practically and legally problematic.