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Three Questions on R-star

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Abstract

The decline in the natural rate of interest, or r-star, over the past decade raises three important questions. First, is this low level for the real short-term interest rate unique to the U.S. economy? Second, is the natural rate likely to remain low in the future? And third, is this low level confined to ?safe? assets? In answer to these questions, evidence suggests that low r-star is a global phenomenon, is likely to be very persistent, and is not confined only to safe assets.

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  • John C. Williams, 2017. "Three Questions on R-star," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfel:00120
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    1. Holston, Kathryn & Laubach, Thomas & Williams, John C., 2017. "Measuring the natural rate of interest: International trends and determinants," Journal of International Economics, Elsevier, vol. 108(S1), pages 59-75.
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    Cited by:

    1. Christophe Blot & Paul Hubert, 2018. "Monetary policy with transitory vs. permanently low growth," Working Papers hal-03404318, HAL.
    2. John C. Williams, 2017. "Interest Rates and the \\"New Normal\\"," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    3. Zhang, Ren & Martínez-García, Enrique & Wynne, Mark A. & Grossman, Valerie, 2021. "Ties that bind: Estimating the natural rate of interest for small open economies," Journal of International Money and Finance, Elsevier, vol. 113(C).
    4. repec:hal:spmain:info:hdl:2441/6gjj4t61tm90aauv9v241g1u29 is not listed on IDEAS
    5. Glick, Reuven, 2020. "r* and the global economy," Journal of International Money and Finance, Elsevier, vol. 102(C).
    6. repec:spo:wpmain:info:hdl:2441/6gjj4t61tm90aauv9v241g1u29 is not listed on IDEAS

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