... strengthening their monetary policy frameworks, using the policy interest rate as the main tool to calibrate the stance of monetary policy. In doing so, central bankers face the difficult task of ... the neutral nominal interest rate, stands for the rate of inflation, is the inflation target of the central bank, is the output gap (measured as the percentage deviation of ... are equal to zero, the interest rate should be set at the neutral rate, so the constant in the Taylor equation can be interpreted as the nominal neutral rate. Specifically, using the Kalman...