The same question for governments and investors: Will long-term interest rates remain low for very a long time?

If long-term interest rates remain low for very a long time: Governments can use more expansionary fiscal policies and finance new public investments by public borrowing without fearing that they will lose their fiscal solvency; in a universe of enduringly low interest rates, the European budgetary rules no longer make sense; Investors can invest in equities and illiquid assets (infrastructure bonds, real estate, private equity) even though the risk premia on these assets have fallen , as the se premia will nevertheless remain substantial if long-term interest rates remain very low,. A quite rapid rise in long-term interest rates would change everything: it would make expansionary fiscal policies and increases in public debt too dangerous; it would mean that there is already an asset price bubble now. Governments and investors must therefore absolutely formulate an opinion as to whether or not the low long-term interest rates will persist.