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Key Findings Details

Productivity Growth and Interest Rate Trends: A Long-Run Analysis
Dmitriy Stolyarov
WP 2016-357

  • Long-run interest rate rises slightly more than one for one with productivity growth rate.
  • A combination of slowing population growth and lower productivity growth would cause a slowdown in global investment demand. Global interest rate could decline by 100-150 basis points within the next 25 years as a result.
  • Long-run projections with intermediate assumptions show the real interest rate on 10-year US government bonds in the 1.5-2.0 percent range.