01878cas a2200253 a 4500 AALejournalIMF015314 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513508382 1018-5941 BD-DhAAL BD-DhAAL Pescatori, Andrea. Lower for Longer : Neutral Rates in the United States / Andrea Pescatori, Jarkko Turunen. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (22 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We use a semi structural model to estimate neutral rates in the United States. Our Bayesian estimation incorporates prior information on the output gap and potential output (based on a production function approach) and accounts for unconventional monetary policies at the ZLB by using estimates of 'shadow' policy rates. We find that our approach provides more plausible results than standard maximum likelihood estimates for the unobserved variables in the model. Results show a significant trend decline in the neutral real rate over time, driven only in part by a decline in potential growth whereas other factors (including excess global savings) matter. Neutral rates likely turned negative during the Global Financial Crisis and are expected to increase only gradually looking forward. Mode of access: Internet Turunen, Jarkko. IMF Working Papers; Working Paper ; No. 2015/135 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/135/001.2015.issue-135-en.xml IMF e-Library