... definition. Furthermore, we argue that there is a difference between thinking about what real interest rate is neutral over the medium run, and what real interest rate is neutral at the current ... time. The more flexible the inflation targeter is, the less likely it is that the real interest rate willdeviate much from the NRR, but the more likely it is that inflation may deviate from the ... correctlyidentify what is causing persistent inflation ‘surprises’ in the inflation rate, once such surprises are observed. The Reserve Bank, like other central banks, must thereforecontinue to operate on the...