Why central bankers look to the ‘stars’ when setting interest rates
- Written by Luke Hartigan, Senior Lecturer in Economics, University of Sydney
James Wheeler/PexelsWhen the topic of central banks and the outlook for interest rates comes up, economists often turn to the so-called “star” variables to help with their predictions.
What do we mean by star variables? Why they are important to central bankers, and how do they influence interest-rate decisions?
The star variables relate...
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