In particular, we use the definition of the neutral rate of interest that Chair Yellen used in a 2015 speech: “the real rate consistent with the economy achieving maximum employment and price stability over the medium term,” which, in an elaboration in a footnote, is said to be “usually thought of as independent of the cyclical disturbances that routinely buffet the economy . .
. [that] fade away after a few years.” 1 The sort of disturbances being captured under the rubric of shifts in r* are thus rarer and more persistent than the usual business cycle phenomena and are associated with the “various adjustment processes that are unusually drawn out by historical standards . . .