Riders on the Storm

Oscar Jorda and Alan Taylor

FRBSF Economic Letter, 2019

Abstract: A country?s interest rate often reflects more than just the policy stance of its central bank. Movements in the global neutral rate of interest and the domestic neutral rate also play a significant role. Estimates from international models for Japan, Germany, the United Kingdom, and the United States show that central bank policy explains less than half of the variation in interest rates. The rest of the time, the central bank is catching up to trends dictated by productivity growth, demographics, and other factors outside of its control.

Date: 2019
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Working Paper: Riders on the Storm (2019)
Working Paper: Riders on the Storm (2019)
Working Paper: Riders on the Storm (2019)
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