Some of the changes are unavoidable, for instance because of technological advances. Other changes are due to political choices and priorities. 1  See Sveriges Riksbank (2019). 2 In the United Kingdom, yields on 10-year real government bonds have fallen from 3.5 per cent on average in  1985-1999 to -0.9 per cent in 2010-2019. The development has been similar in other countries, including the United States and Sweden. 3 In Sweden, annual productivity growth has fallen from an average of 2.6 per cent a year in 1998–2007 to 1.0 per cent in 2010–2018. 2 [7]  But the structural changes affect the conditions for monetary policy. The low real interest rates have reduced the scope for monetary policy to manage economic fluctuations. Policy rates in many countries cannot be cut much from the current levels. The possibilities to push down interest rates with further quantitative easing are limited. If policy cannot be made more expansionary in other ways, the structural changes, combined with a normal economic downturn may lead to the economies getting stuck in a situation with unnecessarily low growth. 4  Fiscal policy will play a larger role in stabilisation policy In the debate, and especially internationally, many suggestions have been put forward on how to make monetary policy more expansionary with other means. There is talk of coordinating fiscal and monetary policy, “helicopter money”, “modern monetary theory” and the purchase of specific private assets.
Notes: Data for the United Kingdom and the United States are derived from nominal bond yields deflated using inflation swaps. The Germany/EA figures are based on nominal Bund yield deflated using euro-area inflation swaps (as a proxy for the euro-area risk free rate). The measure of inflation used is RPI for the United Kingdom and CPI for the United States and the euro area. Data are to close of business 9 February 2015. BIS central bankers’ speeches  25  Chart 15: Population growth Annual percentage change 3  2  2050  2040  2030  2020  2010  2000  1990  1980  1970  1960  1950  1940  1930  1920  1910  1900  1890  1880  1870  1860  1850  1840  1830  1  0  Source: United Nations population projections (http://esa.un.org/wpp/) for 1950 onwards; The Maddison-Project (http://www.ggdc.net/maddison/maddison-project/home.htm) prior to 1950. Chart 16: Business expenditure on Research & Development South Korea  Japan  China  United States  United Kingdom  France  R&D Expenditure as a % of GDP  3.5 3.0  Germany  2.5 2.0 1.5 1.0  1981  1985  1989  1993  1997  2001  2005  2009  2013  0.5  Source: OECD.