Robert M. Darin
Robert L. Hetzel
In the absence of a commonly accepted series of the real rate of interest, the typical behavior of this rate remains contentious. The authors derive alternative measures of the short-term real rate from various surveys of inflation expectations. These measures suggest that the real rate averages about 2 percent. Substantial deviations from this average, however, can occur over extended periods of time.
Subscribe or order single copies of Economic Quarterly and other publication from the Federal Reserve System.