From BIS Quarterly Review, article by G. Benigno, B. Hoffmann, G. Nuno Barrau, and D. Sandri:
Source: BIS Quarterly Review (March 2024).
Note: Here, r* is the real natural rate of interest. Following the convention adopted in this NY Fed piece, I’ll call nominal r* what Summers recently termed the neutral rate, r* plus expected inflation:
For other estimates, see this post.
Lubik-Matthes, at the high end of estimates for the US, indicates about a 4.5% neutral rate, if 2.5% CPI inflation is consistent with 2% PCE inflation, still below the 5-6% range (what Summers called a “5-handle”).
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