An Empirical Measure of the Real Rate of Interest

31 Pages Posted: 15 Nov 2012

See all articles by Robert Darin

Robert Darin

Independent

Robert L. Hetzel

Federal Reserve Banks - Federal Reserve Bank of Richmond

Date Written: 1995

Abstract

In the absence of a commonly accepted series of the real rate of interest, the typical behavior of this rate remains contentious. The authors derive alternative measures of the short-term real rate from various surveys of inflation expectations. These measures suggest that the real rate averages about 2 percent. Substantial deviations from this average, however, can occur over extended periods of time.

Suggested Citation

Darin, Robert and Hetzel, Robert L., An Empirical Measure of the Real Rate of Interest (1995). FRB Richmond Economic Quarterly, vol. 81, no. 1, Winter 1995, pp. 17-47, Available at SSRN: https://ssrn.com/abstract=2129333

Robert Darin

Independent

Robert L. Hetzel (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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