Measuring the Financial Stability Real Interest Rate, r**

Ozge Akinci, Gianluca Benigno, Marco Del Negro, Ethan Nourbash and Albert Queraltó
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Albert Queraltó: https://www.federalreserve.gov/econres/albert-queralto.htm

No 20230524, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Comparing our financial stability real interest rate, r** (“r-double-star”) with the prevailing real interest rate gives a measure of how vulnerable the economy is to financial instability. In this post, we first explain how r** can be measured, and then discuss its evolution over the last fifty years and how to interpret the recent banking turmoil within this framework.

Keywords: financial stability; financial crisis; financial stress; r**; Real interest rate; financial crises (search for similar items in EconPapers)
JEL-codes: E52 G01 G1 G2 (search for similar items in EconPapers)
Date: 2023-05-24
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