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

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account