The Post‑Pandemic r*
![Decorative: U.S. dollars and surgical masks in a still life.](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2023/08/LSE_2023_post-pandemic-r_delnegro_460.jpg?w=920)
The debate about the natural rate of interest, or r*, sometimes overlooks the point that there is an entire term structure of r* measures, with short-run estimates capturing current economic conditions and long-run estimates capturing more secular factors. The whole term structure of r* matters for policy: shorter run measures are relevant for gauging how restrictive or expansionary current policy is, while longer run measures are relevant when assessing terminal rates. This two-post series covers the evolution of both in the aftermath of the pandemic, with today’s post focusing especially on long-run measures and tomorrow’s post on short-run r*.