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Abstract
The Federal Reserve has raised rates twice since the 2016 US election and eyes are now on the future path of the Federal Funds rate, which depends crucially on the Fed’s view of the neutral rate of interest. This column argues that that current policy may be at or close to the natural rate, and that the forces that have led to the low rates are unlikely to be reversed in the immediate future. It also identifies measures that could eliminate secular stagnation via appropriate policy, should negative rates persist.
Citation
Mehrotra, Neil, Jacob A. Robbins, and Gauti B. Eggertsson. “To Accommodate or Not: The Federal Reserve’s New Normal.” VoxEU - CEPR, April 27, 2017.
@online{mehrotra_robbins_eggertsson_2017,
author = {Mehrotra, Neil and Robbins, Jacob A. and Eggertsson, Gauti},
title = {To Accommodate or Not: The Federal Reserve’s New Normal},
year = {2017},
month = {April},
day = {27},
url = {https://cepr.org/voxeu/columns/accommodate-or-not-federal-reserves-new-normal},
note = {Accessed: ...}
}