TY - BOOK ID - 84657448 TI - Lower for Longer : Neutral Rates in the United States AU - Pescatori, Andrea. AU - Turunen, Jarkko. PY - 2015 SN - 1513578502 1513582828 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Interest rates -- United States. KW - Interest rates. KW - Monetary policy -- United States. KW - Monetary policy. KW - Banks and Banking KW - Macroeconomics KW - Production and Operations Management KW - Monetary Policy KW - Macroeconomics: Production KW - Interest Rates: Determination, Term Structure, and Effects KW - Financial Crises KW - Banking KW - Economic & financial crises & disasters KW - Central bank policy rate KW - Output gap KW - Global financial crisis of 2008-2009 KW - Potential output KW - Production growth KW - Financial services KW - Production KW - Financial crises KW - Economic theory KW - Interest rates KW - Global Financial Crisis, 2008-2009 KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84657448 AB - We use a semi structural model to estimate neutral rates in the United States. Our Bayesian estimation incorporates prior information on the output gap and potential output (based on a production function approach) and accounts for unconventional monetary policies at the ZLB by using estimates of “shadow” policy rates. We find that our approach provides more plausible results than standard maximum likelihood estimates for the unobserved variables in the model. Results show a significant trend decline in the neutral real rate over time, driven only in part by a decline in potential growth whereas other factors (including excess global savings) matter. Neutral rates likely turned negative during the Global Financial Crisis and are expected to increase only gradually looking forward. ER -