An Estimation of the Natural Rate of Interest

This estimation approach of the natural rate of interest focuses particularly on the COVID-19 era using various measures of economic activity to better capture an estimate of the output gap. We use both the Oxford Stringency and Google Mobility indices to provide an estimate of potential GDP in order to derive a more accurate definition of the output gap which in turns leads to a more convincing estimate for the natural rate of interest.

This project is in progress with Prof Mehmet Balcilar from the Eastern Mediterranean University in Cyprus.