Real interest rates can change based on how inflation and economic activity move together. When inflation goes up during good times, interest rates can go down, but only if there's no risk of the government not being able to pay its debts. This happens because inflation can help protect lenders from losing money when the economy is bad. However, if inflation is too high, the government might struggle to make payments, which could lead to higher interest rates. The research shows that these patterns match what we see in real-world data.