Longer‐run equilibrium interest rates
Evidence from the United Kingdom
Bibliographic Data
| ID | 9724440 |
|---|---|
| Authors | Omar Kaykhusraw (King's College London, corresponding author) |
| Year | 2025 |
| Volume | 92 |
| Issue | 366 |
| Pages | 457-482 |
| Publication date | 2025-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12566 |
| OpenAlex | W4405795157 |
| Language | EN |
| References cited | 57 |
The natural rate of interest () has recently been in decline, yet little is known about its historical variation. This paper estimates over more than three centuries for the United Kingdom, between 1700 and 2019. Results suggest that the longer‐run equilibrium interest rate rose persistently during much of the 18th and 19th centuries, and only began to decline around the turn of the 20th. Historical decompositions suggest that structural changes in productivity, demography, and risk are largely responsible for this reduction. I argue that secular stagnation is unique to contemporary history, insofar as ascended across much of the Late Modern Era
Economic stagnation · Economics · Interest rate · Keynesian economics · Kingdom · Macroeconomics · Monetary economics · Political science · Productivity · Real interest rate · Secular variation · Sociology · Demography · Economic, financial, and policy analysis · Financial Literacy, Pension, Retirement Analysis · Global Health Care Issues · Law
Risk Shocks
The Rate of Return on Everything, 1870–2015
U.S. Economic Prospects
Demand Side Secular Stagnation
Tests for Parameter Instability and Structural Change With Unknown Change Point
Optimal Tests when a Nuisance Parameter is Present Only Under the Alternative
Macrofinancial History and the New Business Cycle Facts
Shocks and Frictions in US Business Cycles
A New Approach to Linear Filtering and Prediction Problems
The Next Generation of the Penn World Table
British historical statistics
Why You Should Never Use the Hodrick-Prescott Filter
Measuring the Natural Rate of Interest
On Adjusting the Hodrick-Prescott Filter for the Frequency of Observations
A New Normal for Interest Rates? Evidence from Inflation-Indexed Debt
The Cost of Living and Real Wages in Eighteenth Century England
Longer-Run Economic Consequences of Pandemics
Measuring Business Cycles
Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
Pessimism Perpetuated
Trends in Real Wages in Britain, 1750-1913
Balanced estimates of UK GDP 1870–1913
Trend Growth in British Industrial Output, 1700–1913
The Safe Assets Shortage Conundrum
Dating business cycles in the United Kingdom, 1700-2010
The Population History of England, 1541-1871
Output Growth and the British Industrial Revolution
| Citation velocity | historical |
|---|---|
| Highly cited | No |