{
  "title": "Real Equilibrium Interest Rates in the Euro Area",
  "publication": "IMF Working Papers, June 20, 2025",
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  "summary": "Updated estimates of real equilibrium interest rates in the euro area, derived from eight prominent methodologies proposed in the academic literature, deliver a wide range of estimates, partly because they vary in time horizon and economic complexity.",
  "sections": [
    {
      "heading": "Overview and scope",
      "content": "- Title: Real Equilibrium Interest Rates in the Euro Area\n- Authors: Robert C. M. Beyer, Luis Brandão-Marques\n- Publication type: IMF Working Papers\n- Date: June 20, 2025\n- Pages: 33\n- Volume: 2025\n- Issue: 123\n- Series: Working Paper No. 2025/123\n- DOI: https://doi.org/10.5089/9798229013086.001\n- Stock No: WPIEA2025123\n- ISBN: 9798229013086\n- ISSN: 1018-5941"
    },
    {
      "heading": "Key findings",
      "content": "- Updated estimates of real equilibrium interest rates in the euro area are produced using eight prominent methodologies from the academic literature.\n- The methodologies deliver a wide range of estimates, reflecting differences in time horizon and economic complexity.\n- By the end of 2024:\n  - Shorter-term equilibrium rates mostly exceeded longer-term rates.\n  - Foreign spillovers contributed positively to euro area equilibrium rates.\n- Estimated alignment of policy:\n  - ECB policy rates are broadly aligned with short-run efficient rates.\n  - Monetary policy is suggested to have remained restrictive at the end of 2024."
    },
    {
      "heading": "Methodological notes",
      "content": "- Eight prominent methodologies from academic literature are used; they vary in:\n  - Time horizon.\n  - Economic complexity.\n- High uncertainty and a wide range of estimates imply model uncertainty that must be explicitly addressed when drawing conclusions."
    },
    {
      "heading": "Evaluation criteria for judgment-based assessment",
      "content": "- A judgment-based assessment of equilibrium rate estimates should be based on three criteria:\n  - Conceptual fit.\n  - Robustness.\n  - Alignment with other economic indicators."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Because of wide-ranging estimates and model uncertainty:\n  - Formulate robust conclusions and policy recommendations that account for model uncertainty.\n- Current policy assessment:\n  - ECB policy rates broadly match short-run efficient rates.\n  - Monetary stance was restrictive at end-2024."
    },
    {
      "heading": "Subject classifications and keywords",
      "content": "- Subjects: Central bank policy rate, Dynamic stochastic general equilibrium models, Econometric analysis, Financial services, Inflation, Interest rate floor, Monetary policy, Prices, Real interest rates\n- Keywords: Central bank policy rate, Dynamic stochastic general equilibrium models, ECB policy rate, Equilibrium Interest Rates, equilibrium rate, Euro Area, Foreign Spillovers, Global, Inflation, Interest rate floor, longer-term rate, Monetary Stance, open-economy model, Real interest rates\n\nSource: IMF Working Paper — \"Real Equilibrium Interest Rates in the Euro Area\" (Working Paper No. 2025/123), Robert C. M. Beyer and Luis Brandão-Marques, June 20, 2025; DOI: https://doi.org/10.5089/9798229013086.001\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/06/20/real-equilibrium-interest-rates-in-the-euro-area-567741"
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    "Authors: Robert C. M. Beyer, Luis Brandao Marques",
    "Published: June 20, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229013086.001",
    "Title: Real Equilibrium Interest Rates in the Euro Area",
    "Authors: Robert C. M. Beyer, Luis Brandão-Marques",
    "Publication type: IMF Working Papers",
    "Date: June 20, 2025",
    "Pages: 33",
    "Volume: 2025",
    "Issue: 123",
    "Series: Working Paper No. 2025/123",
    "DOI: https://doi.org/10.5089/9798229013086.001",
    "Stock No: WPIEA2025123",
    "ISBN: 9798229013086",
    "ISSN: 1018-5941",
    "Updated estimates of real equilibrium interest rates in the euro area are produced using eight prominent methodologies from the academic literature.",
    "The methodologies deliver a wide range of estimates, reflecting differences in time horizon and economic complexity.",
    "By the end of 2024:",
    "Estimated alignment of policy:",
    "Eight prominent methodologies from academic literature are used; they vary in:",
    "High uncertainty and a wide range of estimates imply model uncertainty that must be explicitly addressed when drawing conclusions.",
    "A judgment-based assessment of equilibrium rate estimates should be based on three criteria:",
    "Because of wide-ranging estimates and model uncertainty:",
    "Current policy assessment:",
    "Subjects: Central bank policy rate, Dynamic stochastic general equilibrium models, Econometric analysis, Financial services, Inflation, Interest rate floor, Monetary policy, Prices, Real interest rates",
    "Keywords: Central bank policy rate, Dynamic stochastic general equilibrium models, ECB policy rate, Equilibrium Interest Rates, equilibrium rate, Euro Area, Foreign Spillovers, Global, Inflation, Interest rate floor, longer-term rate, Monetary Stance, open-economy model, Real interest rates",
    "**Working Paper**"
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