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3/2024 vol. 319
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RESEARCH PAPER
Estimates and Projections of the Natural Rate of Interest for Poland and the Euro Area
Marcin Bielecki 1
,
 
Michał Brzoza-Brzezina 1
,
 
Aneta Błażejowska 1
,
 
Kamila Kuziemska-Pawlak 1
,
 
Grzegorz Szafrański 1
 
 
 
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1
Narodowy Bank Polski, Poland
 
 
Submission date: 2023-12-11
 
 
Final revision date: 2024-04-05
 
 
Acceptance date: 2024-04-18
 
 
Publication date: 2024-09-30
 
 
Corresponding author
Marcin Bielecki   

Narodowy Bank Polski, Poland
 
 
GNPJE 2024;319(3):1-32
DOI: https://doi.org/10.33119/GN/187561
 
 
Article (PDF)
Supplementary files
References (38)
 
KEYWORDS
Poland
euro area
monetary policy
natural rate of interest
 
JEL CLASSIFICATION CODES
E43
E52
E58
 
ABSTRACT
We use a wide range of models (time series, semi-structural and structural) to estimate, project and explain the evolution of the natural rate of interest (NRI) in Poland (PL) and in the euro area (EA). Our findings are as follows: (i) the NRIs declined significantly in both PL and the EA over the last two decades, (ii) our most recent short-term estimates point towards a mildly negative NRI in PL and appreciably more negative NRI in the EA, (iii) our most recent medium-term estimates point towards a mildly positive NRI in PL and a slightly negative NRI in the EA, (iv) the NRI in PL remained consistently above the NRI in the EA by an average of 2–3 pp, (v) the main drivers of the declining NRIs were demographics and the worldwide productivity slowdown, (vi) the main driver of the higher NRI in PL than in the EA was the productivity catch-up in PL, (vii) we expect the NRI in PL to significantly converge to the EA level by the mid-2030s.
 
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