When the topic of central banks and the outlook for interest rates comes up, economists often turn to the so-called “star” variables to help with their predictions. Star variables are named so simply because they are usually labelled with an asterisk to distinguish them from other variables in economic modelling. Non-Accelerating Inflation Rate of Unemployment or NAIRU or u*, a concept that became popular in the 1970s. The neutral interest rate or r* is considered to be the level of the central bank’s key interest rate that is not too low (and stimulating demand) and not too high (and restraining demand). It is a useful guide to the stance of the central bank’s monetary policy, or stance on the policy interest rate.