Good afternoon. It’s a privilege to be a part of the celebration of Banco de México’s Centennial. I was especially honored when Governor Rodriguez asked me to discuss a favorite topic of mine—and one that economists have obsessed over for even longer than a century. Of course, I am talking about r-star, the natural rate of interest. What’s fascinating about variables like r-star is that while they are unobservable, they go to the very heart of monetary theory and practice. Just as the septillion stars we cannot see are vital to the existence of the universe, the constellation of economic stars is critical to our ... (full story)