Growth prospects, the natural interest rate, and monetary policy
The recovery from the Global Financial Crisis was characterized by sluggish output growth and by inflation remaining persistently below the inflation targets of central banks in many advanced economies despite an unprecedented monetary expansion. Ten years after the Global Financial Crisis, GDP rema...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
De Gruyter
2019-12-01
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| Series: | Economics: Journal Articles |
| Subjects: | |
| Online Access: | https://doi.org/10.5018/economics-ejournal.ja.2019-35 |
| _version_ | 1811319348029030400 |
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| author | Fiedler Salomon Gern Klaus-Jürgen Jannsen Nils Wolters Maik |
| author_facet | Fiedler Salomon Gern Klaus-Jürgen Jannsen Nils Wolters Maik |
| author_sort | Fiedler Salomon |
| collection | DOAJ |
| description | The recovery from the Global Financial Crisis was characterized by sluggish output growth and by inflation remaining persistently below the inflation targets of central banks in many advanced economies despite an unprecedented monetary expansion. Ten years after the Global Financial Crisis, GDP remains below its pre-crisis trend in many economies and interest rates continue to be very low. This raises the question of whether low GDP growth and low interest rates are a temporary phenomenon or are due to a decline in long-run growth prospects (potential output growth) and equilibrium real interest rates (natural interest rate). Addressing this question is important for central banks for conducting monetary policy and adjusting their strategy. In this paper, the authors address this question based on a review of the literature and an evaluation of the most recent data and discuss implications for monetary policy. |
| first_indexed | 2024-04-13T12:40:58Z |
| format | Article |
| id | doaj.art-6c75f89462544229864b59e79dc4cc7c |
| institution | Directory Open Access Journal |
| issn | 1864-6042 |
| language | English |
| last_indexed | 2024-04-13T12:40:58Z |
| publishDate | 2019-12-01 |
| publisher | De Gruyter |
| record_format | Article |
| series | Economics: Journal Articles |
| spelling | doaj.art-6c75f89462544229864b59e79dc4cc7c2022-12-22T02:46:31ZengDe GruyterEconomics: Journal Articles1864-60422019-12-0113110.5018/economics-ejournal.ja.2019-35Growth prospects, the natural interest rate, and monetary policyFiedler Salomon0Gern Klaus-Jürgen1Jannsen Nils2Wolters Maik3Kiel Institute for the World Economy,GermanyKiel Institute for the World Economy,GermanyKiel Institute for the World Economy,GermanyFriedrich Schiller University Jena,GermanyThe recovery from the Global Financial Crisis was characterized by sluggish output growth and by inflation remaining persistently below the inflation targets of central banks in many advanced economies despite an unprecedented monetary expansion. Ten years after the Global Financial Crisis, GDP remains below its pre-crisis trend in many economies and interest rates continue to be very low. This raises the question of whether low GDP growth and low interest rates are a temporary phenomenon or are due to a decline in long-run growth prospects (potential output growth) and equilibrium real interest rates (natural interest rate). Addressing this question is important for central banks for conducting monetary policy and adjusting their strategy. In this paper, the authors address this question based on a review of the literature and an evaluation of the most recent data and discuss implications for monetary policy.https://doi.org/10.5018/economics-ejournal.ja.2019-35natural interest ratepotential outputoutput gapmonetary policye31e32e43e52e58 |
| spellingShingle | Fiedler Salomon Gern Klaus-Jürgen Jannsen Nils Wolters Maik Growth prospects, the natural interest rate, and monetary policy Economics: Journal Articles natural interest rate potential output output gap monetary policy e31 e32 e43 e52 e58 |
| title | Growth prospects, the natural interest rate, and monetary policy |
| title_full | Growth prospects, the natural interest rate, and monetary policy |
| title_fullStr | Growth prospects, the natural interest rate, and monetary policy |
| title_full_unstemmed | Growth prospects, the natural interest rate, and monetary policy |
| title_short | Growth prospects, the natural interest rate, and monetary policy |
| title_sort | growth prospects the natural interest rate and monetary policy |
| topic | natural interest rate potential output output gap monetary policy e31 e32 e43 e52 e58 |
| url | https://doi.org/10.5018/economics-ejournal.ja.2019-35 |
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