R-STAR IN TRANSITION ECONOMIES: EVIDENCE FROM SLOVAKIA

• Authors: Kupkovič Patrik
• Languages of publication: EN

Abstracts

EN

The aim of this paper is to estimate the equilibrium real interest rate in Slovakia by means of a semi-structural unobserved components model. The equilibrium real interest rate is understood here as a short-term, risk-free real interest rate consistent with output at its potential level, and inflation at its target level after the effect of all cyclical shock have disappeared. Contribution to the literature is in two ways: (i) development of a modelling framework for small, open, and converging economies which can be used for other transition economies, and (ii) assessment of the adoption of the euro and its effect on the equilibrium real interest rate. Based on the estimates, the equilibrium real interest rate fell from the positive pre-euro (also pre-crisis) level into to the negative territory.

Keywords

EN

EQUILIBRIUM REAL INTEREST RATE; UNOBSERVED COMPONENTS MODEL; TRANSITION ECONOMY; MONETARY POLICY; SLOVAKIA

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2020
• Volume: 68
• Issue: 8
• Pages: 761 – 786

Contributors

author

Kupkovič Patrik

• Research Department of the National Bank of Slovakia, Imricha Karvaša 1, 813 05 Bratislava, Slovak Republic

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2020.08.01