Best viewed on a device with a bigger screen...
The neutral rate in the EZ is falling over time; it was likely negative immediately after the financial crisis.
We estimate the long-run neutral real rate to be 0.7% in the EZ, but the ECB policy rate won’t get that far.
We see the terminal ECB rate at 1.2-to-1.3%, 0.7-to- 0.6pp below current market-pricing.
This publication is only available to Eurozone Economic Research (Monitor) subscribers
Pantheon Macroeconomics produce daily publications for U.S., Eurozone, Latin America, UK and Asia, as well as analysis on key data within a few minutes of their release.
core inflation, deposit rate, ECB, ECB deposit rate, ecb policy, euro, euro area, fed, gdp growth, inflation forecast, interest rates, monetary policy, negative rates, October, output gap, policy, policy rates, q1, real interest rates, stock prices, us, Pantheon Macro, Pantheon Macroeconomics, independent macro research, independent research, ian shepherdson, economic intelligence