See Anne Case and Angus Deaton, Mortality and Morbidity in the 21st  Century, Brookings Papers on Economic Activity, Spring 2017, in which they document declining life expectancy for middle-aged, less-educated non-Hispanic whites in the United States since the year 2000. 2 United Nations, World Populations Prospects: Key Findings and Advance Tables, 2015 Revision. 3 Antonin Bergeaud, Gilbert Cette, and Rémy Lecat, Productivity Trends in Advanced Countries between 1890 and  2012, Review of Income and Wealth, Volume 62, Issue 3, pp. 420–44 (September 2016). 4 Robert J. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War,  Princeton University Press, Princeton, New Jersey, 2016. 5 Carlos Carvalho, Andrea Ferrero, and Fernanda Nechio. Demographics and Real Interest Rates: Inspecting the  Mechanism, European Economic Review, Volume 88, pp. 208–26, 2016; Etienne Gagnon, Benjamin K. Johannsen, and David Lopez-Salido. Understanding the New Normal: The Role of Demographics. Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System, 2016; and Gauti B. Eggertsson, Neil R. Mehrotra, and Jacon A. Robbins, A Model of Secular Stagnation: Theory and Quantitative Evaluation, National Bureau of Economic Research, Working Paper 23093, 2017. 6 Shigeaki Fujiwara, Yuto Iwasaki, Ichiro Muto, Kenji Nishizaki, and Nao Sudo Fujiwara, Developments in the  Natural Rate of Interest in Japan, Bank of Japan Review, October 2016; Kathryn Holston, Thomas Laubach, and John C. Williams, Measure the Natural Rate of Interest: International Trends and Determinants, Journal of International Economics, Volume 108, Supp. 1, pp. S59-S75. (2016).

The combination of low short-term rates and asset purchase programs has driven yields on long-term sovereign debt to historically low levels (Figure 2). In large parts of Europe and Japan, short- and long-term yields remain near zero, a full decade after the onset of the financial crisis. Economic developments since this unprecedented monetary stimulus provide valuable insights into the efficacy and limitations of monetary policy. On the positive side of the ledger, advanced economies have seen steady growth and significant declines in unemployment, with rates today near, or in many cases well below, those seen before the crisis (Figure 3). Bold monetary policy actions surely played an important role in averting far greater catastrophes and aided economic recovery. However, this success was achieved only after a disappointingly slow recovery and many years of economic hardship. And, despite the improvement in the real side of economies, inflation rates have persistently been below central banks’ goals (Figure 4). The fact that inflation has been running below target in most advanced countries—the United Kingdom being the most prominent outlier—suggests that this challenge is not due to factors specific to a single country. Instead, there are more systemic factors at play. Investors view these low inflation readings not as an aberration, but rather a new normal. This is evidenced by a broad-based decline in market-based measures of longer-run inflation expectations since the mid-2000s, with the UK again providing the exception (Figure 5).