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Federal Reserve Bank of Cleveland
Economic Commentary
Have international developments lowered the neutral rate?
Owen F. Humpage

One way to think about monetary policy is in terms of a neutral federal funds rate, one that exerts neither inflationary nor deflationary pressures. Recent declines in worldwide investment, coupled with the growing globalization of financial markets suggest that the neutral rate may be lower than the current stance of monetary policy and the stage of the business cycle may lead one to believe.

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Owen F. Humpage, "Have international developments lowered the neutral rate?" , Federal Reserve Bank of Cleveland, Economic Commentary, issue Dec, 2005.
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Keywords: Federal funds rate ; International finance ; Monetary policy
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