The RBA amusingly reckons Australia’s neutral interest rate is 3.5%. I’d like to see it try to get there. The excellent Damien Boey at Credit Suisse calculates it at 1.1%:
Re-visiting the neutral rate with impaired monetary transmission
We have just published an article, re-visiting our understanding of the neutral rate in an environment characterized by impaired monetary transmission (attached). Our key conclusions are as follows: