Barsky, Robert; Justiniano, Alejandro; Melosi, Leonardo - In: American Economic Review 104 (2014) 5, pp. 37-43
We estimate a state-of-the-art DSGE model to study the natural rate of interest in the United States over the last 20 years. The natural rate is highly procyclical, and fell substantially below zero in each of the last three recessions. Although the drop was of comparable magnitude across the...