With projected low growth, the economy would need less saving and more spending to use resources fully, hence the lower natural rate of interest. (frbsf.org)
Second, a high natural rate of interest implies a large required rate of return and a more stringent hurdle for potential investments to surmount. (greenbackd.com)
The critical implication of a lower natural rate of interest is that conventional monetary policy has less room to stimulate the economy during an economic downturn, owing to a lower bound on how low interest rates can go. (frbsf.org)