Estimates of the natural interest rate for the euro area: an update

Claus Brand, Noëmie Lisack and Falk Mazelis

Economic Bulletin Boxes, 2024, vol. 1

Abstract: The natural rate of interest is defined as the real rate of interest that is neither expansionary nor contractionary. r* is unobservable and its estimation is fraught with a host of measurement and model-specification challenges. A wide range of estimates obtained from a suite of models and approaches suggests that cyclical measures of euro area r* have been edging higher recently. Yet slow-moving estimates anchored to long-run economic trends are unlikely to have risen measurably. JEL Classification: E43, E52

Keywords: natural real rate of interest; neutral real rate of interest (search for similar items in EconPapers)
Date: 2024-02
Note: 92649
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