Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

Well, you are right. The estimates of r* have moved up rather sizably, as you can see in the bottom panel of chart 8 in the Bluebook. The estimate from FRB/US is up about 1 percentage point, meaning that the gap between actual r and r* is bigger than you thought over the prior two years and that the current stance of policy is more accommodative than you thought. I think the revision relates to a couple of things—in part the benchmark revisions and a rethinking of saving behavior but also that the estimate of the risk premium in equity prices is higher.

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