Under PRs, MFBs are required to set 10% of deposit liabilities in liquid assets and transfer 20% of its annual profits after tax into reserve fund until it reaches equivalent to its capital base after which this allocation is reduced to 5%.
Recent interest in estimates of r* has been strengthened by the secular stagnation hypothesis, forcefully put forward by Larry Summers in a number of papers, in which the value of r* plays a central role.2 Research that was motivated in part by attempts that began some time ago to specify the constant term in standard versions of the Taylor rule has shown a declining trend in estimates of r*.