Eurozone Economists Urged To Rethink Neutral Interest Rates

According to BlockBeats, on February 6, the Financial Times reported that Eurozone policymakers are advising economists to reconsider their focus on the so-called neutral interest rate. They caution that this metric may not effectively guide borrowing costs in a region increasingly affected by sluggish growth and global uncertainties. Philip Lane, the European Central Bank's chief economist, emphasized that the ECB should be prepared to lower borrowing costs below the neutral level to stimulate economic growth. He stated, "We should not limit our freedom of action due to a theoretical concept," and added that the ECB should maintain an open mind regarding the final level of interest rates.