Sentences with phrase «real equilibrium interest»
In an environment of persistently low inflation and real equilibrium interest rates, the Fed will not be able to raise rates much further.
https://www.bbvacompass.com/ Not exact matches
Doing this well requires the central bank to be able to discern features of the economy that it can not know with precision — like the potential growth rate or the equilibrium real interest rate.
«What Can the Data Tell Us About the Equilibrium Real Interest Rate?»
If it is a new era of faster growth and new investment opportunities, then the equilibrium real interest rate (the rate at which monetary policy neither boosts nor restrains the economy) would rise, so the central bank would be right to move interest rates towards that level.
If the IT revolution increases profitable investment opportunities, then the equilibrium real interest rate must rise in order to encourage households to save more to finance the higher level of investment.
Jury is still out on secular stagnation — «At present, it looks likely that the equilibrium interest rate will remain low for the policy - relevant future, but there have in the past been both long swings and short - term changes in what can be thought of as equilibrium real rates»
Even if the Bank of Japan did keep real and nominal interest rates low after the country returned to inflation, the old «deflationary equilibrium» would be broken.
Now, we're sympathetic to the idea that prospective real growth and inflation may be sufficiently lower in the future to place us into a low nominal growth world, which would also justify lower equilibrium interest rate levels.
Several additional factors, such as low real interest rates and low volatility in GDP and in inflation rates, can also support elevated equilibrium CAPE ratios.
The real atmosphere gets the dollop of heat from the sun; exciting and interesting stuff happens to equilibrium w / wire in top post Fig. 1 thereafter.
In the face of tightening spreads, increased regulation, and the prospects for rising interest rates, outstanding commercial real estate debt to GDP will continue to rise higher above its long - term equilibrium.