scholarly journals Identification-Robust Estimates of the Canadian Natural Rate of Interest

2016 ◽  
Vol 91 (1-2) ◽  
pp. 161-176
Author(s):  
Maral Kichian
Keyword(s):  
Interest Rate ◽  
Robust Methods ◽  
Errors In Variables ◽  
Natural Rate ◽  
Real Rate ◽  
Point Estimates ◽  
Natural Rate Of Interest ◽  
Best Fitting ◽  
Estimate Precision ◽  
Fitting Model

The natural rate of interest is an unobservable entity and its measurement presents some important empirical challenges. In this paper, we use identification-robust methods and central bank real-time staff projections to obtain estimates for the equilibrium real rate from contemporaneous and forward-looking Taylor-type interest rate rules. The methods notably account for the potential presence of endogeneity, under-identification, and errors-in-variables concerns. Our applications are conducted on Canadian data. The results reveal some important identification difficulties associated with some of our models, reinforcing the need to use identification-robust methods to estimate such policy functions. Despite these challenges, we are able to obtain fairly comparable point estimates for the real equilibrium interest rate across our different models, and in the case of the best fitting model, also remarkable estimate precision.

scholarly journals The Natural Rate of Interest and the Optimal Rate of Interest in the Steady State

2021 ◽  
pp. 17-41
Author(s):  
Carl Christian von Weizsäcker ◽  
Hagen M. Krämer
Keyword(s):  
Steady State ◽  
Public Debt ◽  
Fundamental Equation ◽  
Optimal Rate ◽  
Natural Rate ◽  
Real Rate ◽  
Capital Theory ◽  
Steady State Rate ◽  
Natural Rate Of Interest ◽  
State Rate

AbstractThe “natural rate of interest” is the hypothetical, risk-free real rate of interest that would obtain in a closed economy, if net public debt were zero. It is considerably less than the optimal steady-state rate of interest, which is equal to the system’s growth rate. This holds for a very general “meta-model.” The fundamental equation of capital theory holds on the optimal steady-state path: T = Z − D, where T is the overall economic period of production, Z is the representative private “waiting period” of consumers and D is the public debt ratio. Prosperity is at least 30% lower at the natural rate of interest than at the optimal rate.

Brazil: monetary policy and the neutral interest rate

2016 ◽  
Vol 43 (6) ◽  
pp. 966-979
Author(s):  
Cleomar Gomes da Silva ◽  
Rafael Cavalcanti de Araújo
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Real Interest Rate ◽  
Design Methodology ◽  
Macroeconomic Model ◽  
Natural Rate ◽  
Content Type ◽  
Natural Rate Of Interest ◽  
The Interest Rate ◽  
Definition Of

Purpose The purpose of this paper is to analyze the conduct of monetary policy in Brazil and estimate the country’s neutral real interest rate. Design/methodology/approach The authors make use of a state-space macroeconomic model representation. Findings The period of analysis goes from 2003 up to the end of 2013 and the results show that the country’s natural rate of interest was around 4.2 percent in December 2013. Originality/value One of the main differences of this work is the inclusion of variables such as the real exchange rate and world interest rate. This is important because these variables play an important role in the definition of the interest rate and, consequently, in the definition of the neutral interest rate.

Natural Interest Rate: Sraffa Vs. Hayek Debates

2019 ◽  
Vol 2019 (3) ◽  
pp. 3-16
Author(s):  
Aleksandr Kovalev
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Economic Thought ◽  
Business Cycle Theory ◽  
Natural Rate ◽  
Main Method ◽  
Natural Rate Of Interest ◽  
History Of ◽  
The Impact

This article deal with the discussion between F. Hayek and P. Sraffa in the 1930s. This piece of the history of economic thought is not presented in the Russian-speaking literature. The main method is a content analysis. The directions of criticism Hayek’s business cycle theory by Sraffa and the response towards is analyzed in the paper. The author compared the opponents’ approaches to the essence of the equilibrium, to the savings-investments equality, to the possibility to lose capital as a result of malinvestments, to the role of expectations, and to the natural rate of interest. A version was offered for explaining the ineffectiveness of Hayek's answer to the question on the multiplicity of natural interest rates and the reasons why the barter economy has been perceived as theoretical basis of the Hayekian analysis. It is the inaccurate wording of the natural interest rate and the representation the theory within the framework of the equilibrium paradigm. The findings of the research may be applied to analyze the impact of interest rate regulation on the economic.

CREDIT AND THE PROBLEM OF TRUST IN THE THOUGHT OF JOHN LOCKE, c. 1668–1704

2020 ◽  
pp. 1-22
Author(s):  
JON COOPER
Keyword(s):  
Seventeenth Century ◽  
Interest Rate ◽  
John Locke ◽  
Moral Community ◽  
Natural Rate ◽  
Private Banks ◽  
Public Credit ◽  
Bank Of England ◽  
Natural Rate Of Interest ◽  
The Interest Rate

Abstract This article presents a reinterpretation of John Locke's contribution to debates about the interest rate in the seventeenth century. It suggests that his argument that England should maintain the ‘natural’ rate, rather than impose a lower rate, was motivated by his theological, moral, and social conceptions of credit and its dependence on trust. In order to solve the endemic shortage of metal coin limiting the growth of monetary exchange in England, Locke stressed that the higher, ‘natural’ rate of interest would facilitate interpersonal borrowing and lending among neighbours, allowing currency to flow more freely around the country. By contrast, while he acknowledged that institutional creditors such as goldsmith-bankers could quicken the circulation of money by issuing debt instruments like bills of exchange, he saw institutional credit as a threat to the moral community. Not only did he question how people could rationally trust financiers without any epistemic apprehension of their personal probity, but he moreover doubted whether individuals accumulating so much money were likely to act trustworthily. Finally, using an otherwise unstudied dialogue about the Bank of England, this article argues Locke extended his criticisms about the threats posted by private banks to the country's nascent system of public credit.

scholarly journals The Case against the New "Secular Stagnation Hypothesis"

2021 ◽  
Vol 24 (2) ◽  
pp. 219-253
Author(s):  
Mihai Macovei
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Explanatory Power ◽  
Bank Loan ◽  
Rate Theory ◽  
Natural Rate ◽  
Secular Stagnation ◽  
Natural Rate Of Interest ◽  
The Global Financial Crisis

The new “secular stagnation hypothesis” developed by Lawrence H. Summers attempts to justify why the demand stimulus applied in the aftermath of the global financial crisis failed to revive growth in a satisfactory manner. Building on previous ideas of Keynes, Hansen, and Bernanke, Summers claims that excess savings together with feeble investment drove the natural rate of interest down to zero and advanced economies into stagnation. As the US monetary policy rate is not allowed to fall below the zero bound, Summers calls for “quantitative easing” and more expansionary fiscal policy to spur investment demand. This paper refutes Summers’s hypothesis by revealing its internal inconsistencies and presenting both theoretical arguments and empirical evidence on the long-term evolution of savings, investment, productivity, and capital stock. It also estimates the natural rate of interest following the approach of Salerno (2020), which is further refined based on Rothbard’s “pure interest rate” theory. The calculation shows that the natural interest rate did not drop to zero after the global financial crisis, but has actually remained consistently and significantly above the federal funds rate and the bank loan prime rate. This not only invalidates Summers’s central claim, but confirms once more the explanatory power of the Austrian business cycle theory in relation to the main trigger of the global financial crisis and its subsequent unfinished recovery.

scholarly journals The Time - Varying Natural Rate of Interest and Its Fundamental Determinants: Time Series Evidence from Turkey

2016 ◽  
Vol 6 (2) ◽  
pp. 390
Author(s):  
Ilyas Siklar ◽  
Umit Yildiz ◽  
Sinan Cakan
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Interest Rate ◽  
Time Series Data ◽  
Series Data ◽  
Natural Rate ◽  
Output Price ◽  
Natural Rate Of Interest ◽  
Causality Relationship ◽  
The Interest Rate

In this study, by estimating the natural rate of interest, its relationship with key macroeconomic variables is analyzed using the time series data obtained from Turkey. As a first step, together with the natural rate of interest, the potential levels of output, prices and foreign exchange rate are estimated by using the Kalman Filter algorithm and then the related gap levels of each variable representing the deviations from their potentials are determined. As a second step of the study, the effects of output, price and exchange rate gaps on the interest rate gap are analyzed by using cointegration and error correction methodologies and the causality relationship among variables are examined. The main conclusion of the current study is that there is significant causality relationship between the interest rate gap, output, price and exchange rate gaps.

165 Effects of Digestible Lysine Level on Growth Performance and Economics of Grow-finish Pigs

2021 ◽  
Vol 99 (Supplement_1) ◽  
pp. 58-59
Author(s):  
Larissa L Becker ◽  
Emily E Scholtz ◽  
Joel M DeRouchey ◽  
Mike D Tokach ◽  
Jason C Woodworth ◽  
...  
Keyword(s):  
Phase 1 ◽  
Information Criterion ◽  
Response Curves ◽  
Phase 3 ◽  
Ileal Digestibility ◽  
Distillers Dried Grains ◽  
Feed Cost ◽  
Best Fitting ◽  
Dietary Treatments ◽  
Fitting Model

Abstract A total of 2,124 barrows and gilts (PIC 1050′DNA 600, initially 48.9 kg) were used in a 32-d study to determine the optimal dietary standardized ileal digestibility (SID) Lys level in a commercial setting. Pigs were randomly allotted to 1 of 5 dietary treatments with 24 to 27 pigs/pen and 16 replications/treatment. Similar number of barrows and gilts were placed in each pen. Diets were fed over 3 phases (48.9 to 58.6, 58.6 to 70.9, and 70.9 to 80.8 kg respectively). Dietary treatments were corn-soybean meal-based and contained 10 (phase 1 and 2) or 5% (phase 3) distillers dried grains with solubles. Diets were formulated to 85, 95, 103, 110, or 120% of the current Pig Improvement Company (PIC, Hendersonville, TN) SID Lys gilt recommendations with phase 1 SID Lys levels of 0.90, 1.01, 1.09, 1.17 and 1.27%, phase 2 levels of 0.79, 0.87, 0.94, 1.03, and 1.10%, and phase 3 levels of 0.71, 0.78, 0.85, 0.92, and 0.99%, respectively. Dose response curves were evaluated using linear (LM), quadratic polynomial (QP), broken-line linear (BLL), and broken-line quadratic (BLQ) models. For each response variable, the best-fitting model was selected using the Bayesian information criterion. Overall (d 0 to 32), increasing SID Lys increased (linear, P< 0.001) BW, ADG, G:F, Lys intake/d, and Lys intake/kg of gain. Modeling margin over feed cost (MOFC), BLL and QP estimated the requirement at 105.8% and 113.7% respectively. In summary, while growth increased linearly up to 120% of the PIC current feeding level, the optimal MOFC was 106% to 114% depending on the model used.

Genetic and Environmental Influences of Dietary Indices in a UK Female Twin Cohort

2020 ◽  
Vol 23 (6) ◽  
pp. 330-337
Author(s):  
Olatz Mompeo ◽  
Rachel Gibson ◽  
Paraskevi Christofidou ◽  
Tim D. Spector ◽  
Cristina Menni ◽  
...  
Keyword(s):  
Healthy Eating ◽  
Menopausal Status ◽  
Healthy Eating Index ◽  
Healthy Diet ◽  
Nutritional Epidemiology ◽  
Best Fitting ◽  
Heritability Estimates ◽  
Fitting Model ◽  
Dietary Indices ◽  
Health Parameters

AbstractA healthy diet is associated with the improvement or maintenance of health parameters, and several indices have been proposed to assess diet quality comprehensively. Twin studies have found that some specific foods, nutrients and food patterns have a heritable component; however, the heritability of overall dietary intake has not yet been estimated. Here, we compute heritability estimates of the nine most common dietary indices utilized in nutritional epidemiology. We analyzed 2590 female twins from TwinsUK (653 monozygotic [MZ] and 642 dizygotic [DZ] pairs) who completed a 131-item food frequency questionnaire (FFQ). Heritability estimates were computed using structural equation models (SEM) adjusting for body mass index (BMI), smoking status, Index of Multiple Deprivation (IMD), physical activity, menopausal status, energy and alcohol intake. The AE model was the best-fitting model for most of the analyzed dietary scores (seven out of nine), with heritability estimates ranging from 10.1% (95% CI [.02, .18]) for the Dietary Reference Values (DRV) to 42.7% (95% CI [.36, .49]) for the Alternative Healthy Eating Index (A-HEI). The ACE model was the best-fitting model for the Healthy Diet Indicator (HDI) and Healthy Eating Index 2010 (HEI-2010) with heritability estimates of 5.4% (95% CI [−.17, .28]) and 25.4% (95% CI [.05, .46]), respectively. Here, we find that all analyzed dietary indices have a heritable component, suggesting that there is a genetic predisposition regulating what you eat. Future studies should explore genes underlying dietary indices to further understand the genetic disposition toward diet-related health parameters.

Comparing productive vocabulary measures from the CDI and a systematic diary study

1999 ◽  
Vol 26 (1) ◽  
pp. 177-185 ◽  
Author(s):  
BYRON F. ROBINSON ◽  
CAROLYN B. MERVIS
Keyword(s):  
Growth Curves ◽  
Diary Study ◽  
Expressive Vocabulary ◽  
Early Language ◽  
Vocabulary Size ◽  
Early Language Development ◽  
Closed Class ◽  
Communicative Development ◽  
Best Fitting ◽  
Fitting Model

Expressive vocabulary data gathered during a systematic diary study of one male child's early language development are compared to data that would have resulted from longitudinal administration of the MacArthur Communicative Development Inventories spoken vocabulary checklist (CDI). Comparisons are made for (1) the number of words at monthly intervals (9;10.15 to 2;0.15), (2) proportion of words by lexical class (i.e. noun, predicate, closed class, ‘other’), (3) growth curves. The CDI underestimates the number of words in the diary study, with the underestimation increasing as vocabulary size increases. The proportion of diary study words appearing on the CDI differed as a function of lexical class. Finally, despite the differences in vocabulary size, logistic curves proved to be the best fitting model to characterize vocabulary development as measured by both the diary study and the CDI. Implications for the longitudinal use of the CDI are discussed.

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