In a specialized economic model, researchers studied how monetary policy impacts innovation and growth. They focused on how the interest rate affects investment in research and human skill development. When interest rates rise, research and human capital investments decrease, which slows down long-term technological advancement and economic growth. This slowdown is more significant with human capital that grows naturally. By lowering the interest rate, the economy can experience a substantial increase in welfare, equivalent to a nearly 3% boost in consumption. This means that adjusting monetary policy can have a powerful positive impact on the economy's well-being.