Secular Decline in Global Interest Rates

This is a preview from the National Institute Economic Review, November 2016, no 238

Ahead of the forthcoming issue of the National Institute Economic Review (NIER no. 238) that will be published on Wednesday 2nd November, we release a series of boxes, each of them looking at specific aspects of economic policy in the post Referendum period.

This box, prepared by Jack Meaning and Rebecca Piggott, addresses the issue of secular decline in global interest rates.

Jack Meaning, Research Fellow, said: "Economic theory tells us that the global neutral rate depends on saving and investment preferences and expectations of global trend growth. Therefore, it would seem that either saving is running ahead of investment demand, or that there has been a persistent downward movement in the expectation of future global output."