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\"The Monetary Policy Implications of a Low R-Star: An Update,\" Joint DNB/ECB Workshop on the Natural Rate of Interest, De Nederlandsche Bank, Amsterdam, Netherlands

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Abstract

r* is, in practice, a low-frequency trend measure of a short-term real interest rate, and this talk will take a regime-switching view of this issue.{{p}}Observed low real interest rates are associated with government debt, not necessarily with capital.{{p}}There appears to be a large demand for safe assets globally, and this may be the largest factor driving real interest rates to low levels in the past three decades.{{p}}There is only modest evidence that key trends influencing the natural rate of interest are changing today.

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  • James B. Bullard, 2019. "\"The Monetary Policy Implications of a Low R-Star: An Update,\" Joint DNB/ECB Workshop on the Natural Rate of Interest, De Nederlandsche Bank, Amsterdam, Netherlands," Speech 339, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlps:339
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    1. Thomas Laubach & John C. Williams, 2003. "Measuring the Natural Rate of Interest," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1063-1070, November.
    2. Lukasz Rachel & Thomas Smith, 2015. "Secular Drivers of the Global Real Interest Rate," Discussion Papers 1605, Centre for Macroeconomics (CFM).
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