Why So Low for So Long? A Long-Term View of Real Interest Rates

Claudio Borio, Piti Disyatat, Mikael Juselius, Phurichai Rungcharoenkitkul

Research output: Contribution to journalArticleScientificpeer-review

2 Citations (Scopus)


Prevailing explanations of the long-term decline in real interest rates are premised on the notion that real interest rates over long periods are driven by variations in the underlying real forces governing desired saving and investment. Based on long historical data stretching back to 1870 for 19 countries, we cast doubt on this view. While it is possible to find some relationships consistent with the theory in some periods, particularly over the last 30 years, they do not survive over the extended sample. This holds both at the national and at the global level. Among external factors, interest rates of financially dominant countries appear important in explaining real interest rates across countries, pointing to the possible role of
global financial factors.
Original languageEnglish
Peer-reviewed scientific journalInternational Journal of Central Banking
Issue numberSeptember
Pages (from-to)47-87
Publication statusPublished - 2022
MoE publication typeA1 Journal article - refereed


  • 511 Economics


Dive into the research topics of 'Why So Low for So Long? A Long-Term View of Real Interest Rates'. Together they form a unique fingerprint.

Cite this