Accessible Version
Accessible Version
Figure 1. Effects on the Long-Run Equilibrium Federal Funds Rate
| Bar | Federal Funds Rate |
|---|---|
| Slower growth | -1.15 |
| Demographics | -0.75 |
| Lower investment | -0.63 |
| Slower foreign growth | -0.31 |
Source: Calculations by Federal Reserve Board staff based on simulation results from the Board's FRB/US model. Details are provided in the appendix.
Figure 2. Long-Run Effects of Animal Spirits and Fiscal Policy on Interest Rates
| Bar | Federal Funds Rate |
|---|---|
| Higher investment | 0.29 |
| Higher government spending | 0.50 |
| Tax cut | 0.41 |
Note: Shocks scaled to 1 percent of gross domestic product.
Source: Calculations by Federal Reserve Board staff based on simulation results from the Board's FRB/US model. Details are provided in the appendix.
Last Update:
October 17, 2016