Global Trends in Interest Rates
The trend in the world real interest rate for safe and liquid assets fluctuated close to 2 percent for more than a century, but has dropped significantly over the past three decades. This decline has been common among advanced economies, as trends in real interest rates across countries have converged over this period. It was driven by an increase in the convenience yield for safety and liquidity and by lower global economic growth.
We are grateful to Carlo Favero, Stefano Neri, and Ken West for their thoughtful feedback, to Ozge Akinci, Giancarlo Corsetti, Stefano Eusepi, Paolo Pesenti, and several other New York Fed economists for very helpful suggestions, and to Brandyn Bok for outstanding research assistance. The views expressed in this paper are those of the authors and do not necessarily reflect the position of the Federal Reserve Banks of New York and Dallas, the Federal Reserve System, or the National Bureau of Economic Research.
Del Negro, Marco & Giannone, Domenico & Giannoni, Marc P. & Tambalotti, Andrea, 2019. "Global trends in interest rates," Journal of International Economics, Elsevier, vol. 118(C), pages 248-262. citation courtesy of