More than a decade after the global financial crisis, the world is struggling with the health and economic effects of a profound new crisis caused by the COVID-19 pandemic. Advanced economies entered this crisis with interest rates at historical lows and public debts, on average, higher than they had been over the past 60 years. They will come out from the crisis with even higher public debts. Drawing on analysis completed before the emergence of the pandemic, this chapter examines policymakers’ options to respond to adverse shocks and build resilience when rates are low and debts high. Even when rates are low, central banks still have wide scope to use unconventional monetary policy tools to support the economy, although questions remain about side effects on future financial stability and threats to central bank independence with their use. When monetary policy is constrained, countercyclical fiscal policy needs to play a larger role. The analysis shows that, prior to the current crisis and over the past few years, declining interest rates relative to growth modestly reduced the average rise in debt ratios in advanced economies compared with earlier projections. […]