Equilibrium real interest rates and secular stagnation: An empirical analysis for euro area member countries

Ansgar Belke and Jens Klose

No 621, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Is secular stagnation a valid concern for Euro Area countries? We tackle this question using the well-established Laubach-Williams model to estimate the unobservable equilibrium real interest rate and compare it to the actual real rate. We apply our approach to twelve Euro Area countries, since heterogeneity among member countries has become considerably extensive since the beginning of the financial crisis. Hence, the question of secular stagnation has to be answered at the country level. Our results indicate that secular stagnation does not appear to be a significant threat to most Euro Area countries. But there is one exception: Greece.

Keywords: equilibrium real interest rate; secular stagnation; Euro Area countries; heterogeneity (search for similar items in EconPapers)
JEL-codes: C32 E43 F45 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Equilibrium Real Interest Rates and Secular Stagnation: An Empirical Analysis for Euro Area Member Countries (2017)
Working Paper: Equilibrium Real Interest Rates and Secular Stagnation: An Empirical Analysis for Euro-Area Member Countries (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:621

DOI: 10.4419/86788723

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