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HandWiki. Natural Rate of Interest. Encyclopedia. Available online: https://encyclopedia.pub/entry/30398 (accessed on 25 September 2026).
HandWiki. Natural Rate of Interest. Encyclopedia. Available at: https://encyclopedia.pub/entry/30398. Accessed September 25, 2026.
HandWiki. "Natural Rate of Interest" Encyclopedia, https://encyclopedia.pub/entry/30398 (accessed September 25, 2026).
HandWiki. (2022, October 20). Natural Rate of Interest. In Encyclopedia. https://encyclopedia.pub/entry/30398
HandWiki. "Natural Rate of Interest." Encyclopedia. Web. 20 October, 2022.
Natural Rate of Interest
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The content is sourced from: https://handwiki.org/wiki/Finance:Natural_rate_of_interest

The natural rate of interest, sometimes called the neutral rate of interest, is the interest rate that supports the economy at full employment/maximum output while keeping inflation constant. It cannot be observed directly. Rather, policy makers and economic researchers aim to estimate the natural rate of interest as a guide to monetary policy, usually using various economic models to help them do so.

economic models rate of interest policy

References

  1. The study, published in German in 1898, became available in English in 1936. See Wicksell, K. Interest and Prices., Mises Institute website. https://mises.org/library/interest-and-prices
  2. The Collected Writings of John Maynard Keynes. Volume 5. P. 139.
  3. Laubach, Thomas (March 13, 2006). "Measuring the Natural Rate of Interest". The Review of Economics and Statistics 85 (4): 1063–1070. doi:10.1162/003465303772815934.  https://dx.doi.org/10.1162%2F003465303772815934
  4. "A natural long-term rate", The Economist, 26 October 2013. Retrieved 28 May 2018. https://www.economist.com/finance-and-economics/2013/10/26/a-natural-long-term-rate
  5. Jose Dorich, Abeer Reza and Subrata Sarker, 'An Update on the Neutral Rate of Interest', Bank of Canada Review, Autumn 2017. https://www.bankofcanada.ca/wp-content/uploads/2017/11/boc-review-autumn2017-dorich.pdf
  6. Atif Mian, Ludwig Straub, Amir Sufi "What explains the decline in r∗? - Rising income inequality versus demographic shifts" study prepared for the 2021 Jackson Hole Economic Symposium hosted by the Federal Reserve Bank of Kansas City, August 2021. https://www.kansascityfed.org/documents/8337/JH_paper_Sufi_3.pdf
  7. Gavyn Davies, 'What investors should know about R star', The Financial Times, 12 September 2016. https://www.ft.com/content/da86ba6a-f1a4-37e5-af23-d7fa64d47466
  8. President's speeches, Speeches by John C. Williams, President and CEO, Federal Reserve Bank of San Francisco.
  9. John Williams, for example, refers to a "trio" of factors – demographics, productivity growth, and the global demand for safe assets. https://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2018/may/future-fortunes-r-star-are-they-rising/
  10. John C. Williams, 'When the facts change...'. Remarks at a High level conference in Zurich, 14 May 2019. https://www.newyorkfed.org/newsevents/speeches/2019/wil190514
  11. Jerome H. Powell. 2018. "Monetary Policy in a Changing Economy", Jackson Hole Symposium, Wyoming, United States, 24 August. https://www.federalreserve.gov/newsevents/speech/powell20180824a.htm
  12. Rachel McCririck and Daniel Rees, 'The Neutral Interest Rate', Bulletin, Reserve Bank of Australia, September quarter 2017. https://www.rba.gov.au/publications/bulletin/2017/sep/pdf/bu-0917-2-the-neutral-interest-rate.pdf
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