Measuring the Natural Rate of Interest: The Role of Inflation Expectations

Posted: 13 Aug 2020

See all articles by David Lopez-Salido

David Lopez-Salido

Board of Governors of the Federal Reserve System

Gerardo Sanz-Maldonado

Board of Governors of the Federal Reserve System

Carly Schippits

Board of Governors of the Federal Reserve System

Min Wei

Board of Governors of the Federal Reserve System

Date Written: June 29, 2020

Abstract

The "natural" or equilibrium real rate of interest is an important concept in macroeconomics. On the one hand, the natural (real) rate provides a description of the real interest rate path consistent with the eventual full capacity of utilization of available resources in the context of low and stable inflation.

Suggested Citation

Lopez-Salido, David and Sanz-Maldonado, Gerardo and Schippits, Carly and Wei, Min, Measuring the Natural Rate of Interest: The Role of Inflation Expectations (June 29, 2020). FEDS Notes No. 2020-06-19 https://doi.org/10.17016/2380-7172.2593, Available at SSRN: https://ssrn.com/abstract=3673516

David Lopez-Salido (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Gerardo Sanz-Maldonado

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Carly Schippits

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Min Wei

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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