Estimating The Natural Interest Rate for Peru: A Financial Approach

This paper estimates the natural interest rate for Peru in the period 2004-2010. Two models are estimated: a model based on the uncovered interest rate parity (UIP), and the other based on the forward rate of the yield curve. Estimation results show a decreasing trend of the natural interest rate in the period under study –on line with the international evidence- and a expansive stance of the monetary policy (positive interest rate gap).