It contains a number of estimates of the “Equilibrium Real Federal Funds Rate” – the interest rate that if maintained would return the economy over time to its so-called potential, the highest level of output that does not lead to undue inflationary pressures. The book also includes calculations of policy solutions using policy rules as well as model-based estimates of optimal policy.
This instrument has contributed significantly to improve liquidity management and ensure a smooth yield curve. There is a fourth element that I wish to highlight. I am speaking of climate change, which is fast emerging as a priority for many countries.