The Most Important Interest Rate That You Have Never Heard Of

Ernie Tedeschi, Visiting Fellow at the Georgetown Psaros Center for Financial Markets and Policy and former Chief Economist at the Council of Economic Advisers, The White House, wrote about R*, the natural rate of interest – the “most important unobservable economic concept at the moment.” 

In this paper, Tedeschi explains the long and short-term run of R* and theorizes about the effects of the pandemic, the impact of fiscal and political risks, and why it is currently rising. 

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