to lower unemployment. this is also what labour force survey flow statistics show. further reduction in unemployment requires measures from other policy areas. the third and final challenge is the fact that skills matching on the labour market has deteriorated. this implies that output and employment are not as high as they could have been without the matching problems. monetary policy can scarcely improve matching on the swedish labour market. here, too, measures in other policy areas are required. it is a question of increasing productivity among unemployed persons and reducing the cost of employing them. labour market policy has a crucial role to play here. 15 references bell, d. n. f. and d. g. blanchflower ( 2018 ), “ the lack of wage growth and the falling nairu ”, nber working paper 24502. blanchard, o. ( 2016 ), “ the phillips curve : back to the ’ 60s? ”, american economic review : papers & proceedings 106 ( 5 ), 31 – 34. cunliffe, j. ( 2017 ), “ the phillips curve : lower, flatter or in hiding? ”, speech at the oxford economics society, 14 november, bank of england. dow, j. c. r. and l. a. dicks - mireaux ( 1958 ), “ the excess demand for labour. a study of conditions in great britain, 1946 - 56 ”, oxford economic papers 10, no. 1, 1 - 33. forder, j. ( 2014 ), macroeconomics and the phillips curve myth, oxford university press. friedman, m. ( 1968 ), “ the role of monetary policy ”, american economic review 58 ( 1 ), pp. 1 – 17. karlsson, s. and p. osterholm ( 2018 ), “ is the us phillips curve stable? evidence from bayesian vars ”, working paper 2018 : 5, school of business, orebro university. karlsson, s. and p. osterholm ( 2018 ), “ a note on the stability of the swedish phillips curve ”, working paper 2018 : 6, school of business, orebro university. kinnwall, m. and a. rune ( 2018 ), “ teknikforetagen : riksbanken skapar bubblor ” [ association of swedish engineering industries : the riksbank is creating bubbles ], debate article in swedish in dagens industri, 29 march. leduc, s. and j.

than the second approach. however, its estimates will only be plausible if a forecast of the future actual policy rate is actually a good estimate of the neutral rate. we then take a simple average across the nine models to derive a central estimate of the neutral real rate. this is a standard approach to dealing with model uncertainty. nonetheless, it is important to remember that each model is estimated with considerable uncertainty, and we are combining these highly uncertain estimates. you can see the wide range of the different model estimates in this graph ; they span a range from −0. 5 per cent to 2 per cent, with the model average just under 1 per cent ( graph 2 ). graph 2 real neutral interest rate average of the model estimates % % model - average range of available estimates * - 2 - 2 real cash rate ( ex ante ) * * - 4 real cash rate ( ex post ) * * * - 6 - 4 - 6 * * * range of central estimates corresponding to available models. the ex - ante real cash rate is deflated using expected inflation ; december quarter 2022 value is a preliminary estimate. * * * the ex - post real cash rate is deflated using year - ended trimmed mean inflation ; december quarter 2022 value is a preliminary estimate. source : rba how has it changed? the other point to note about the estimates in the graph are that they have declined over the course of several decades, and noticeably so in the wake of the global financial crisis ( gfc ). this decline is common globally ( graph 3 ), which is to be expected as the neutral rate largely rests on global factors. the causes of this common downward trend are less clear - cut, however. many possible explanations have been proposed in the literature. some are more plausible than others, and of course there could be more than one thing going on. graph 3 real neutral interest rates * % % united states australia united kingdom canada euro area new zealand - 1 - 1 * last data point for united states, united kingdom, euro area and canada is june 2020. sources : holston, laubach and williams ( 2017 ) ; rba ; rbnz one possible cause is the apparent decline in potential output growth, which has been a multidecade trend common across advanced economies ( graph 4 ). lower potential growth reduces expected future demand. in turn, it reduces firms ’ incentive to invest and so decreases the interest rate that balances investment with desired saving. graph 4 neutral interest rates and