Staff Memo

Estimates of the neutral rate of interest in Norway

Author: Leif Brubakk, Jon Ellingsen and Ørjan Robstad
Series: Staff Memo
Number: 7/2018

Staff Memo 7/2018 (PDF 673.8 Kb)

In this paper, we estimate the neutral real rate for the Norwegian economy using two different empirical models, a vector autoregressive model with time-varying parameters (TVP-VAR) and a State-Space (SS) model similar to the Laubach-Williams model, respectively. In line with international evidence, all estimates indicate a falling trend. Furthermore, the estimates for Norway suggest that the Norwegian neutral short-term money market rate is now close to 0 percent in real terms.

Published 22 August 2018 16:00