A quick comment on the current discussion over the seemingly low natural rate of interest. Perhaps we should put more weight on the views of those who, in retrospect, have been right about the macroeconomy:
1. Those who, at the time, thought that Fed policy was too tight in late 2008 (something that Bernanke has now admitted).
2. Those who correctly predicted that the contractionary effects of the 2013 fiscal cliff would be offset by monetary policy.
3. Those who correctly predicted that the BOJ could sharply depreciate the yen, if they wanted to.