Seminar The Financial (In)Stability Real Interest Rate, r** Departmental Seminar Add to calendar 2025-01-27 11:00 2025-01-27 12:15 Europe/Rome The Financial (In)Stability Real Interest Rate, r** Seminar Room 3rd Floor Villa La Fonte YYYY-MM-DD Print Share on Facebook Share on X Share on LinkedIn Send by email When 27 January 2025 11:00 - 12:15 CET Where Seminar Room 3rd Floor Villa La Fonte Organised by Department of Economics In this departmental seminar, Gianluca Benigno (University of Lausanne) will present the paper 'The Financial (In)Stability Real Interest Rate, r**.' We build a macro-finance model with an occasionally binding financing constraint where real interest rates have opposite effects on current and future financial stability, with the contemporaneous impact driven by valuation effects and the future impact driven by reach-for-yield by intermediaries. We use this model to illustrate the concept of the financial stability interest rate, r**, which we propose as a quantitative summary statistic for financial vulnerabilities. We provide a measure of r** for the US economy and discuss its evolution over the past 50 years.Co-author: Ozge Akinci Scientific Organiser(s): Prof. Alexander Ludwig (Goethe University, Frankfurt) Prof. Barbara Rossi (EUI - Department of Economics) Speaker(s): Prof. Gianlunca Benigno (University of Lausanne)