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Assessing global potential output growth and the US neutral rate: April 2022

Author

Listed:
  • Kyle Boutilier
  • Thomas J. Carter
  • Xin Scott Chen
  • Eshini Ekanayake
  • Louis Poirier
  • Peter Shannon
  • Akash Uppal
  • Lin Xiang

Abstract

We expect global potential output growth to increase from 2.7% in 2021 to 2.9% by 2024. Compared with the April 2021 assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, 0.25 percentage points higher than staff’s last assessment.

Suggested Citation

  • Kyle Boutilier & Thomas J. Carter & Xin Scott Chen & Eshini Ekanayake & Louis Poirier & Peter Shannon & Akash Uppal & Lin Xiang, 2022. "Assessing global potential output growth and the US neutral rate: April 2022," Staff Analytical Notes 2022-4, Bank of Canada.
    • Handle: RePEc:bca:bocsan:22-4
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    References listed on IDEAS

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    1. Congressional Budget Office, 2021. "The Budget and Economic Outlook: 2021 to 2031," Reports 56970, Congressional Budget Office.
    2. Congressional Budget Office, 2021. "An Update to the Budget and Economic Outlook: 2021 to 2031," Reports 57218, Congressional Budget Office.
    3. Xin Scott Chen & Ali Jaffery & Guillaume Nolin & Karim Salhab & Peter Shannon & Subrata Sarker, 2020. "Assessing Global Potential Output Growth: October 2020," Discussion Papers 2020-10, Bank of Canada.
    4. Alex Domash & Lawrence H. Summers, 2022. "How Tight are U.S. Labor Markets?," NBER Working Papers 29739, National Bureau of Economic Research, Inc.
    5. Faberman, R. Jason & Mueller, Andreas I. & Şahin, Ayşegül, 2022. "Has the Willingness to Work Fallen during the Covid Pandemic?," Labour Economics, Elsevier, vol. 79(C).
    6. Roine, Jesper & Vlachos, Jonas & Waldenström, Daniel, 2009. "The long-run determinants of inequality: What can we learn from top income data?," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 974-988, August.
    7. Fares Bounajm & Jean-Philippe Cayen & Michael Francis & Christopher Hajzler & Kristina Hess & Guillaume Poulin-Bellisle & Peter Selcuk, 2019. "Assessing Global Potential Output Growth: April 2019," Staff Analytical Notes 2019-13, Bank of Canada.
    8. Thomas J. Carter & Xin Scott Chen & Ali Jaffery & Christopher Hajzler & Jonathan Lachaine & Peter Shannon & Subrata Sarker & Graeme Westwood & Beiling Yan, 2021. "Assessing global potential output growth and the US neutral rate: April 2021," Staff Analytical Notes 2021-5, Bank of Canada.
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    Cited by:

    1. Salma Ahmed & Aviel Avshalumov & Tania Chaar & Eshini Ekanayake & Helen Lao & Louis Poirier & Jenna Rolland-Mills & Argyn Toktamyssov & Lin Xiang, 2023. "Assessing global potential output growth and the US neutral rate: April 2023," Staff Analytical Notes 2023-5, Bank of Canada.
    2. Martin Kuncl & Dmitry Matveev, 2023. "The Canadian Neutral Rate of Interest through the Lens of an Overlapping-Generations Model," Discussion Papers 2023-5, Bank of Canada.
    3. Guyllaume Faucher & Christopher Hajzler & Martin Kuncl & Dmitry Matveev & Youngmin Park & Temel Taskin, 2022. "Potential output and the neutral rate in Canada: 2022 reassessment," Staff Analytical Notes 2022-3, Bank of Canada.

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    More about this item

    Keywords

    Interest rates; Monetary policy; Potential output; Productivity;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F0 - International Economics - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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