... ~∑, being the weight of past consumption in the degree of habit persistence. Denoting the growth rate of potential output by g, the NRIR can be obtained by solving the following equation: ... 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 ... of the policy rate by hindering the proper functioning of the transmission channel of monetary policy (see Medina Cas and others, 2011a,b). Indeed, muted inflationary pressures and tightening...