Safe haven flows, natural interest rates and secular stagnation—Empirical evidence for Euro area countries

Ansgar Belke and Jens Klose

International Review of Economics & Finance, 2021, vol. 76, issue C, 1164-1190

Abstract: This article introduces a new measure to capture safe haven flows for twelve Euro area countries. Since those flows are suspected to alter the natural rate of interest, which is at the heart of the discussion whether certain countries face a period of secular stagnation, we estimate the natural rate including those flows explicitly. It is shown that adding this measure indeed changes the estimated natural rate and thus the degree of evidence of secular stagnation in various countries. It is found that the natural rate tends to decrease in countries with safe haven inflows and increases in countries with safe haven outflows.

Keywords: Safe haven; Portfolio flows; Natural interest rate; Secular stagnation; Euro area member countries (search for similar items in EconPapers)
JEL-codes: C32 E43 F45 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Safe haven flows, natural interest rates and secular stagnation: Empirical evidence for euro area countries (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:76:y:2021:i:c:p:1164-1190

DOI: 10.1016/j.iref.2021.08.012

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