The natural rate of interest would have a clear interpretation in a solid dynamic general equilibrium model. Nevertheless, the determinants of the natural rate of interest vary, depending on how the model is specified. It is well known that, in some specific cases, the natural rate of interest coincides with the potential growth rate of the economy, but this is not always the case.
Loi M Bakani: Save today for a better tomorrow Address by Mr Loi M Bakani, Acting Governor of the Bank of Papua New Guinea, at the Pacific Regional Conference on Microsavings, Port Moresby, 28-29 June 2005. *  *  *  Welcome Minister for Inter-Government Relations – Hon.