The conceptual foundation of r-star originates from the classical economic models of Knut Wicksell. Wicksell separated interest rates into two distinct indicators: the Money Rate (the actual interest rate charged by commercial banks) and the Natural Rate (the expected return on new capital investments).
The Cumulative Inflation Sequence
Wicksell proved that deviations between these two rates drive structural imbalances across the pricing system:
[Money Rate Drops Below Natural Rate] 
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           v
[Commercial Borrowing Volumes Spike] --------> Expands credit demand beyond capacity
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           v
[Aggregate Demand Outpaces Supply Nodes] ---> Creates structural shortages
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           v
[The Cumulative Inflation Process] ---------> Drives continuous upward price adjustments

If the money rate stays below the natural rate for an extended period, it fuels an ongoing upward spiral in prices, requiring the central bank to intervene and raise lending costs to restore macroeconomic equilibrium.
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