Measuring the natural interest rate for the Macedonian economy: a multi-model approach

Mite Miteski (), Magdalena Petrovska () and Ррñ‚ð°ð½ Сулејмани ()
Additional contact information
Mite Miteski: National Bank of the Republic of North Macedonia
Magdalena Petrovska: National Bank of the Republic of North Macedonia
Ррñ‚ð°ð½ Сулејмани: National Bank of the Republic of North Macedonia

No 2023-02, Working Papers from National Bank of the Republic of North Macedonia

Abstract: This paper identifies the natural interest rate for the Macedonian economy using quarterly data for 2001Q4-2019Q3. To this end, the estimation is made by using different types of models, such as the Holston, Laubach, and Williams model and the full-fledged country-specific structural MAKPAM model. The empirical results show that the natural rate of interest in the Macedonian economy has declined over time, which is similar to the findings for other countries. The decomposition of the natural rate suggests that the main driver for the decline is the slowdown of the Macedonian potential GDP growth in the period after the global economic crisis, although there are signs of its recovery at the end of the sample period. In addition, the results indicate that the monetary policy conditions in the Macedonian economy have been broadly accommodative from 2011Q4 onwards. The substantive conclusions are unchanged across the multiple models used in this study.

Keywords: Natural interest rate; interest rate gap; Holston; Laubach; and Williams model; MAKPAM Model (search for similar items in EconPapers)
JEL-codes: C32 E43 E52 O40 (search for similar items in EconPapers)
Pages: 25
Date: 2023
New Economics Papers: this item is included in nep-ban, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.nbrm.mk/content/Measuring-the-Natural- ... Economy_WP2-2023.pdf First version, 2023 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mae:wpaper:2023-02

Access Statistics for this paper

More papers in Working Papers from National Bank of the Republic of North Macedonia Contact information at EDIRC.
Bibliographic data for series maintained by Jovica Mitik ().