##n ( 2012 ) and mian, rao and sufi ( 2013 ). bis central bankers ’ speeches additional evidence from the hfcs also suggests that low - income households may be financially particularly vulnerable to economic shocks, as they, for example, typically face higher debt - assets and debt service - to - income ratios than households with higher incomes. in summary, research and evidence from available data thus suggest that all of the aforementioned factors, together with tighter credit constraints, depressed income expectations and heightened perceptions of uncertainty, are likely to contribute to a sluggish recovery of household spending from the recession. these additional factors also likely vary across households and geographic regions ; for example, estimates from the hfcs data suggest that younger, less educated households and households living in mediterranean countries face tighter credit constraints. similarly, lower - income and less wealthy households may have been affected by larger adverse income shocks, and may also have cut their spending more sharply in response to these shocks. monetary policy, in turn, has responded to the crisis by lowering nominal interest rates to levels close to the zero lower bound. this monetary policy easing has quite substantially alleviated the financial burden on holders of mortgages. 5 in addition, as documented in hurst and stafford ( 2004 ), reductions in mortgage rates stimulate the economy substantially as households with accumulated home equity can refinance their mortgages at a lower rate in order to reduce their stream of mortgage payments, or to access accumulated home equity, which may be particularly relevant in times of distress. this can be partially offset by the fact that the income and spending of net savers will be negatively affected by a decline in interest rates. however, the offsetting effect is likely to remain moderate because a substantial proportion of households ( 50 % – 80 % in most countries ) are not able to save and because the savings of those who do may be less sensitive to interest rates, as the latter tend to be wealthier and to have more diversified assets. among many other factors, two key parameters which affect the economy ’ s response to interest rate changes are the mortgage participation rate, i. e. the proportion of households holding a mortgage, and the fixation periods of mortgage rates. as we know, both parameters vary substantially across euro area countries – for example, the proportion of households holding a mortgage on their main residence varies between around 9 % ( in italy and slovakia ) and more than 30 % ( in cyprus, luxembourg, the netherlands and finland ). similarly, the share of variable

developed world in the 19th and 20th centuries. pandemics have ravaged many parts of the world before. and global economic crises have been a recurring feature of the globalised economy. but three factors make the current challenges unique. the first is their sheer scale and complexity. global challenges are now highly complex and require unprecedented levels of multilateral coordination. when countries set out to close the hole in the ozone layer in the mid - 1980s, for example, the solution essentially required only a handful of the largest chemical companies to stop producing cfcs [ 2 ] and find alternatives. but addressing climate change is orders of magnitude more difficult. not only do we have to contend with the multiple faces of climate change – more extreme weather patterns, rising sea levels, loss of ecosystems and biodiversity – but regions are also affected in different ways and at different speeds. this makes devising timely solutions across countries exceptionally complex. that complexity leads to the second factor that defines the challenges we face today : more than ever, we can only make progress by working together across countries, sectors and disciplines. take our response to the pandemic as an example. this was a challenge that could not be tackled by governments acting alone, or even by governments cooperating with each other. it required a truly joint approach between science and policy, between business and government. policymakers had to put aside preconceived notions, be prepared to further integrate science into policymaking, and have the courage to follow the emerging evidence wherever it led. and it is now clear that governments which chose to do so performed better – in terms of both protecting lives and shielding the economy – than those that did not. in parallel, businesses had to work alongside governments to accelerate our common response – and where they did, the results were remarkable. within a few months, tests for infection had been made available. and within a year, highly effective vaccines had been developed – thanks not least to dr ozlem tureci and her team at biontech. we are seeing this dynamic again today as we respond to the refugee crisis triggered by the russian invasion of ukraine. here in germany, deutsche bahn was quick to make train journeys free for ukrainians travelling through the country, thereby easing the burden for those who were displaced. and deutsche telekom stopped charging for calls from germany to ukraine. but as the need for cooperation becomes ever greater, we see a countervailing wind blowing : the world is moving in directions that make collective action harder. and