Real interest rates have been persistently below historical norms over the past decade,
leading economists and policy makers to view the equilibrium real interest rate as likely to …

The natural rate is an abstraction; like faith, it is seen by its works. One can only say that if
the bank policy succeeds in stabilizing prices, the bank rate must have been brought in line …

The level of real interest rates actually observed does not necessarily coincide with its
“natural” level. This paper contrasts a number of approaches that have served to elaborate …

The equilibrium real interest rate (r*) is the short-term real interest rate that, in the long run, is
consistent with aggregate production at potential and stable inflation. Estimation of r* faces …

The downtrend in US interest rates over the past two decades may partly reflect a decline in
the longer-run equilibrium real rate of interest. We examine this issue using dynamic term …

An extensive literature has analyzed the macroeconomic effects of shocks to the level of
aggregate productivity; however, there has been little corresponding research on sustained …

We use a range of simple models and 22 years of real-time data vintages for the US to
assess the difficulties of estimating the equilibrium real interest rate in real time. Model …

Emerging markets have experienced a sizeable decline in their neutral real interest rates
until recently. In this paper we try to identify the main factors that contributed to it, with a focus …

We propose an alternative way of estimating Taylor reaction functions if the zero‐lower
bound on nominal interest rates is binding. This approach relies on tackling the real rather …

By focusing on the literature on the estimates of the natural rate of interest, this paper
critically analyses the modern practice of identifying the benchmark rate of monetary policy …