Neiss, Katharine; Nelson, Edward - C.E.P.R. Discussion Papers - 2001
spread between the actual real interest rate and its flexible-price, or natural-rate, counterpart. We examine the properties … of the natural real interest rate and ‘real interest rate gap’ using a dynamic stochastic general equilibrium model … indicator and forecasting properties of the real interest rate gap for inflation, both in the model and in the data. Our results …