Latin American Natural Rates of Interest

Luciano Campos
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Luciano Campos: CONICET/IIEP

No 271, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: This paper estimates the natural rate of interest for the six biggest Latin American economies. Considering the fact that money velocity is the permanent component of the nominal interest rate, both the nominal and real natural rates are estimated simply by running an OLS regression. It is evidenced a downward trend in the real natural rate since the 2010s, comparable with the decline displayed by potential output once the favorable conditions of the 2000s commodity boom were over. This result has direct implications for the monetary stance evaluation in the region, which is analyzed as well in this work.

Keywords: Natural rate of interest; money velocity; Latin America (search for similar items in EconPapers)
JEL-codes: E58 N16 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2023-09
New Economics Papers: this item is included in nep-ban, nep-cba and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:271

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