In-depth: have central banks worsened the secular slowdown?


The decline in neutral rates is “not directly affected” by Federal Reserve policy, chair Jerome Powell told lawmakers in November testimony. Powell’s statement reflects a broad consensus among central bankers. But not everyone agrees.

An economist from the International Monetary Fund, Bas Bakker, argues that instead, the decline in neutral rates (often known as r*) may very well be a direct result of central bank policy.

If correct, his orthodoxy-busting paper may provide novel answers to key

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