The Post‑Pandemic Global R*

Marco Del Negro, Elena Elbarmi and Michael Pham

No 20260225, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In this post we provide a measure of “global” r* using data on short- and long-term yields and inflation for several countries with the approach developed in “Global Trends in Interest Rates” (Del Negro, Giannone, Giannoni, and Tambalotti). After declining significantly from the 1990s to before the COVID-19 pandemic, global r* has risen but remains well below its pre-1990s level. These conclusions are based on an econometric model called “trendy VAR” that extracts common trends across a multitude of variables. Specifically, the common trend in real rates across all the countries in the sample is what we call global r*. The post is based on the discussion of an insightful paper by Lukasz Rachel on the drivers of r* presented at the Brookings Papers on Economic Activity Fall 2025 conference.

Keywords: macroeconomics (search for similar items in EconPapers)
JEL-codes: E43 (search for similar items in EconPapers)
Date: 2026-02-25
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:102824

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DOI: 10.59576/lse.20260225

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