The Natural Interest Rate and Secular Stagnation

Lance Taylor
Written By SCEPA

WORKING PAPER

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This paper reviews literature and theory on macroeconomics' use of the "natural" interest rate.

The "natural" interest rate in loanable funds macroeconomic models doesn't always fit the data. New Keynesian models, in which economic performance is determined by loanable funds, are inconsistent with macroeconomic data.

SCEPA
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