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Why are real interest rates so low?

Author

Listed:
  • Francois Velde

    (Federal Reserve Bank of Chicago)

  • Benoït Mojon
  • Magali Marx

    (banque de france)

Abstract

We try to account for the persistently low real interest rates (the “secular stagnation†hypothesis) in a quantitative model that encompasses most of the likely factors (demographics, productivity, inequality, financial constraints). We find it difficult to account for both the level and the change over the past two decades, at least in a model without uncertainty, and turn to explore the role of attitudes toward risk.

Suggested Citation

  • Francois Velde & Benoït Mojon & Magali Marx, 2016. "Why are real interest rates so low?," 2016 Meeting Papers 1581, Society for Economic Dynamics.
  • Handle: RePEc:red:sed016:1581
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    References listed on IDEAS

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    Cited by:

    1. Giuseppe Ferrero & Marco Gross & Stefano Neri, 2019. "On secular stagnation and low interest rates: Demography matters," International Finance, Wiley Blackwell, vol. 22(3), pages 262-278, December.

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