Ifin Seminar, Gianluca Benigno, HEC Lausanne - The Financial (In)Stability Real Interest Rate, R**
Istituto di finanza
Data: 26 marzo 2026 / 12:25 - 13:40
Speaker: Gianluca Benigno, HEC Lausanne
Title: The Financial (In)Stability Real Interest Rate, R**
Date: 26.03.2026
Time: 12:35 - 13:40
Room: Red Room (Exec. Center)
Abstract
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.