Analysis of Real Interest Rates Trends and Calculations

This technical report examines the changing nature of real interest rates, focusing on their volatility over the past 50 years. It discusses the historical context of positive real interest rates in the 1980s and 1990s, the shift to negative values since the 2000s, and the recent rise back to positive territory in mid-2023 due to central banks' actions against inflation. The report reviews the theoretical background of real interest rates, the practices of central banks and investment banks, and the development of these rates in both developed and emerging markets. It also analyzes the relationship between risk indicators and real interest rates, emphasizing the importance of understanding these rates for monetary policy effectiveness. The report details various methods for calculating real interest rates, including forward-looking and backward-looking approaches, and discusses their implications for investment decisions and economic conditions.