The neutral or natural rate of interest, also called r-star (r*), is the real (net of inflation) interest rate that supports the economy at full employment/maximum output while keeping inflation constant. It cannot be observed directly.
The neutral or natural rate of interest, also called r-star (r*), is the real (net of inflation) interest rate that supports the economy at full employment/maximum output while keeping inflation constant. It cannot be observed directly.
Source: Wikipedia "Neutral rate of interest" · CC BY-SA 4.0
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