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What is the neutral real interest rate, and how can we use it?

  • Joanne Archibald
  • Leni Hunter

    (Reserve Bank of New Zealand)

Registered author(s):

    This article sets out the Reserve Bank's conception of the "neutral real interest rate", and identifies factors that influence its level. These factors provide a starting point for thinking about what might cause the neutral real interest rate to change over time, or differ across countries. We consider the uses and limitations of neutral real interest rates in answering some of the questions that are relevant to monetary policy, and present a range of estimates of the neutral real interest rate for New Zealand.

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    File URL: http://www.rbnz.govt.nz/research_and_publications/reserve_bank_bulletin/2001/2001sep64_3ArchibaldHunter.pdf
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    Article provided by Reserve Bank of New Zealand in its journal Reserve Bank of New Zealand Bulletin.

    Volume (Year): 64 (2001)
    Issue (Month): (September)
    Pages:

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    Handle: RePEc:nzb:nzbbul:september2001:2
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    1. Allsopp, Christopher & Glyn, Andrew, 1999. "The Assessment: Real Interest Rates," Oxford Review of Economic Policy, Oxford University Press, vol. 15(2), pages 1-16, Summer.
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    4. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
    5. Alan S. Blinder, 1999. "Central Banking in Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522608, June.
    6. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December.
    7. Christian Hawkesby & Christie Smith & Christine Tether, 2000. "New Zealand's currency risk premium," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 63, September.
    8. Neiss, Katharine & Nelson, Edward, 2001. "The Real Interest rate Gap as an Inflation Indicator," CEPR Discussion Papers 2848, C.E.P.R. Discussion Papers.
    9. Meredith Beechey & Nargis Bharucha & Adam Cagliarini & David Gruen & Christopher Thompson, 2000. "A Small Model of the Australian Macroeconomy," RBA Research Discussion Papers rdp2000-05, Reserve Bank of Australia.
    10. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
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