About this work
Stronger productivity and prospective changes in US fiscal, labor and trade policy motivate a reassessment of the neutral interest rate. The December 2024 analysis links higher potential output with persistent inflation pressures and market expectations, arguing that the interest rate baseline should adjust to a more resilient economy.
Abstract
Stronger productivity and prospective changes in US fiscal, labor and trade policy motivate a reassessment of the neutral interest rate. The December 2024 analysis links higher potential output with persistent inflation pressures and market expectations, arguing that the interest rate baseline should adjust to a more resilient economy.
Cite this work
Marcello Estevão, Jonathan Fortun (2024). Global Macro Views: The Productivity Surge and Policy Shake-Up: Time to Recalibrate r*. Institute of International Finance.