The Information Content of the Natural Rate of Interest: The Case of Poland

Macroeconomics from University Library of Munich, Germany

Abstract: In this paper, I use a structural VAR model and the Kalman filter to estimate the natural rate of interest (NRI) in Poland. I show how the NRI can yield important information for a central banker. First, estimation of the NRI can be helpful for monetary authorities, seeking to stabilize inflation after a long process of disinflation. Second, for a country trying to join a monetary union there exists an additional information content of the estimated NRI. The bigger the difference between the candidates and the Unions natural rates, the more likely the “Portuguese” scenario of a widening current account after adopting the common currency.

Keywords: Poland; natural rate of interest; SVAR; transition economy (search for similar items in EconPapers)
JEL-codes: C32 E31 E43 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-02-04
New Economics Papers: this item is included in nep-ifn and nep-mon
Note: Type of Document - pdf; prepared on WinXP; pages: 29; figures: 6
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0402007

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