Oesterreichische Nationalbank, Otto-Wagner-Platz 3, 1090 Vienna, Austria


hybrid, Vienna


Thursday, December 7, 2023

In cooperation with

A secular decline in r* was one of the key drivers of the strategy reviews carried out by the ECB and the FED in the years 2019-2021. While we have seen an increase in r* after the multiple shocks that started with the Covid crisis, it is not clear whether the secular decline in r* may have stopped or reversed or whether this increase is only temporary. This is an important question in the short-term because it will give an indication of how much central banks have to tighten to reign on inflation. In the medium and long-term it is important because it will influence the type of instruments that central banks should have in their toolkits if we were again approaching the effective lower bound on interest rates.

This workshop calls for a broader view of “equilibrium interest rate”. It explores various concepts of the natural rate along different dimensions, such as time (short versus long-run horizon, short-term versus long-term rates) or sectoral (public debt vs. private capital). Moreover, it addresses the novel concept of the financial (in)stability rate of interest. In addition to a comparative and careful juxtaposition and appraisal of the various concepts, the workshop seeks to answer the following questions: (1) What are past and future trends in the level of these various “equilibrium rates”? (2) Which “equilibrium rate of interest” may be most informative for which policy purpose?

This workshop brings together the latest theoretical and empirical research on this topic, which is central for both monetary policy and longer-term structural policies. Presentations aim to be accessible to audiences active in the policy, advisory and investment community, to allow immediate insights for policy and investment decisions.

Scientific coordination: Ernest Gnan, SUERF and Maria T. Valderrama, OeNB 


Thursday, 7 December 2023
Welcome and opening remarks

Living with R* or Working on R*

Robert Holzmann, Governor, OeNB
Session 1: Conceptual challenges: which r* to look at for what purpose? 

Keynote lecture: The future long-run level of interest rates

Ricardo Reis, A. W. Phillips Professor of Economics, LSE I SUERF Fellow presentation
Adrian Penalver, Deputy Director, Monetary and Financial Studies Directorate, Banque de France presentation
Stefano Neri, Head, Economic Outlook and Monetary Policy Directorate, Banca d’Italia I SUERF presentation
Session 2: Endogeneity of r* to monetary policy  
Chair: Deniz Igan, Head of Macroeconomic Analysis, BIS I SUERF Vice-President

The natural rate of interest through a hall of mirrors

Phurichai Rungcharoenkitkul, Director , Monetary Policy Strategy Office, Bank of Thailand - Joining remotely presentation

Co-author: Fabian Winkler, Federal Reserve Board

Star struck: Monetary Policy and the Neutral Real Rate

Garo Garabedian, Senior Economist, Monetary Policy Division, Central Bank of Ireland presentation

The Financial (In)Stability Real Interest Rate, R**

Gianluca Benigno, Professor of Economics, University of Lausanne presentation

co-authors: Ozge Akinci, Marco Del Negro (Fed NY), Albert Queralto (Fed Washington)

Session 3: The long view: looking back and ahead and implications for monetary policy
Chair: Ernest Gnan, Secretary General, SUERF

The effects of climate change on the natural rate of interest

Francesco Paolo Mongelli, Senior Adviser, DG Monetary Policy, ECB I Honorary Professor, Goethe University Frankfurt presentation

co-authors: Jan Willem van den End, De Nederlandsche Bank, Wolfgang Pointner, OeNB 

Long-run trends in long-maturity real rates 1311-2021

Paul Schmelzing, Assistant Professor of Finance, Boston College - Joining remotely

co-authors: Kenneth S. Rogoff (Harvard University), Barbara Rossi (Universitat Pompeu Fabra)

Secular drivers of the natural rate of interest: Looking ahead

Josef Platzer, Economist, International Monetary Fund (IMF) - Joining remotely presentation

Co-author: Marcel Peruffo (IMF)

Housing and the secular decline in real interest rates

Markus Knell, Senior Expert, Oesterreichische Nationalbank presentation