{
  "title": "Where Are Real Interest Rates Headed?",
  "publication": "IMF Blog, April 1, 2014",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2014/04/01/where-are-real-interest-rates-headed",
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  "summary": "Authors: Davide Furceri, Andrea Pescatori",
  "sections": [
    {
      "heading": "Context and framing",
      "content": "- Authors: Davide Furceri, Andrea Pescatori\n- Publication date: April 1, 2014\n- Topic: Recent declines in real interest rates (real cost of borrowing) and prospects over the next five to ten years.\n- Key historical statistic: average global 10 year real rate declined from 6 percent in 1983 to almost zero in 2012."
    },
    {
      "heading": "Observed trend and immediate drivers",
      "content": "- Recent interest rate declines have been global.\n- The decline reflects, to a large extent, weak economic conditions in advanced economies after the global financial crisis.\n- Implication: some reversals are likely as advanced economies return to a more normal state."
    },
    {
      "heading": "Factors that could push real interest rates higher (medium term)",
      "content": "- High and rising debt levels in advanced economies.\n- Population aging.\n- Monetary policy tapering.\n- Financial deepening in emerging market economies, which would reduce borrowing constraints and thereby net saving."
    },
    {
      "heading": "Factors that could push real interest rates lower or keep them low",
      "content": "- Long-lasting negative effects of the global crisis on economic activity.\n- Persistence of the “saving glut” in key emerging market economies.\n- Renewed declines in the relative price of investment goods."
    },
    {
      "heading": "Forward-looking analysis and engagement",
      "content": "- The forthcoming analytical chapter of the World Economic Outlook constructs a new dataset of real interest rates for a wide set of countries and provides a perspective on where real interest rates and, more generally, the cost of capital are heading.\n- Live webcast: Watch the live webcast of the analytical chapters of the World Economic Outlook on Thursday April 3 at 9 am (EST) on www.imf.org, where the IMF will discuss its latest thinking on these issues.\n\nIMF Blog — Where Are Real Interest Rates Headed?, Davide Furceri and Andrea Pescatori, April 1, 2014.\n\n---\n\n\n References\n\n- www.imf.org\n- https://www.imf.org/wp-content/uploads/2014/03/slide1.jpg\n\nSource: https://www.imf.org/en/blogs/articles/2014/04/01/where-are-real-interest-rates-headed"
    }
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    "Authors: Davide Furceri, Andrea Pescatori",
    "Published: April 1, 2014",
    "Authors: Davide Furceri, Andrea Pescatori",
    "Publication date: April 1, 2014",
    "Topic: Recent declines in real interest rates (real cost of borrowing) and prospects over the next five to ten years.",
    "Key historical statistic: average global 10 year real rate declined from 6 percent in 1983 to almost zero in 2012.",
    "Recent interest rate declines have been global.",
    "The decline reflects, to a large extent, weak economic conditions in advanced economies after the global financial crisis.",
    "Implication: some reversals are likely as advanced economies return to a more normal state.",
    "High and rising debt levels in advanced economies.",
    "Population aging.",
    "Monetary policy tapering.",
    "Financial deepening in emerging market economies, which would reduce borrowing constraints and thereby net saving.",
    "Long-lasting negative effects of the global crisis on economic activity.",
    "Persistence of the “saving glut” in key emerging market economies.",
    "Renewed declines in the relative price of investment goods.",
    "The forthcoming analytical chapter of the World Economic Outlook constructs a new dataset of real interest rates for a wide set of countries and provides a perspective on where real interest rates and, more generally, the cost of capital are heading.",
    "Live webcast: Watch the live webcast of the analytical chapters of the World Economic Outlook on Thursday April 3 at 9 am (EST) on www.imf.org, where the IMF will discuss its latest thinking on these issues.",
    "[www.imf.org](http://www.imf.org/)",
    "[https://www.imf.org/wp-content/uploads/2014/03/slide1.jpg](https://www.imf.org/wp-content/uploads/2014/03/slide1.jpg)"
  ],
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