Estimates of the Neutral Rate of Interest in Norway
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Date
2018Metadata
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- Staff Memo [282]
Abstract
In this paper, we estimate the neutral real rate for the Norwegian economy using two different empirical models, a vector autoregressive model with time-varying parameters (TVP-VAR) and a State-Space (SS) model similar to the Laubach-Williams model, respectively. In line with international evidence, all estimates indicate a falling trend. Furthermore, the estimates for Norway suggest that the Norwegian neutral short-term money market rate is now close to 0 percent in real terms.