Retrieving "Neutral Real Interest Rate" from the archives

Cross-reference notes under review

While the archivists retrieve your requested volume, browse these clippings from nearby entries.

1. Central Banks

   Linked via "neutral real interest rate"

   $$it = r^ + \alpha \pit + \beta (y_t - y^)$$
   Where $r^$ is the neutral real interest rate, $\alpha$ and $\beta$ are response coefficients, and $(y_t - y^)$ is the output gap. A central bank's perceived commitment to this rule directly impacts $\alpha$ and $\beta$. Deviations, particularly those related to political pressure to maintain artificially low rates during periods of mild overheating, can lead to a phenomenon known as "Sticky Credibility Decay (SCD)," where market agents begin…