A copy of this work was available on the public web and has been preserved in the Wayback Machine. The capture dates from 2021; you can also visit the original URL.
The file type is
In an era when the primary policy instrument is the level of the short-term interest rate, a comparison of that rate with some equilibrium rate can be a useful guide for policy and a convenient method to measure the stance of monetary policy. The real interest rate gap—the difference between the real equilibrium rate and the rate set by the central bank—can thus serve as a leading indicator of future inflationary or deflationary pressures in the economy. The authors estimate equilibriumdoi:10.34989/swp-2004-9 fatcat:4xbqvtk6hje5dnze7nktlqa5qq