We then take a simple average across the nine models to derive a central estimate of the neutral real rate. This is a standard approach to dealing with model uncertainty. Nonetheless, it is important to remember that each model is estimated with considerable uncertainty, and we are combining these highly uncertain estimates.
You can see the wide range of the different model estimates in this graph; they span a range from −0.5 per cent to 2 per cent, with the model average just under 1 per cent (Graph 2).