The equilibrium real interest rate in the "new normality" ("Frankfurter Allgemeine Zeitung")

How long-term bond yields are not simply defined by monetary policy and short-term interest rates but by many other influences is the topic of an article of the "Frankfurter Allgemeine Zeitung". Factors like demography or the lower real economic growth in industrial countries play a role. In the discussion about the "new normality" the "Frankfurter Allgemeine" also cites a working paper by John Taylor and Volker Wieland regarding the equilibrium real interest rate.

The common finding of many economists is that the rate has declined to a level not seen in decades. In their working paper, however, Taylor and Wieland show that the perceived decline may well be due to shifts in regulatory policy and monetary policy that have been omitted from the research.

FAZ and FAZIT-Blog: "Leitzinsen beeinflussen Anleiherenditen, aber bestimmen sie nicht"

IMFS Working Paper No. 103
John B. Taylor und Volker Wieland
"Finding the Equilibrium Real Interest Rate in a Fog of Policy Deviations"

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