Falling productivity and low interest rates may form vicious circle – BdF paper
Researchers use data on 17 advanced economies to investigate secular stagnation hypothesis
Advanced economies may be trapped in a vicious circle of low interest rates and falling productivity, a working paper published by the Banque de France says.
In The circular relationship between productivity growth and real interest rates, Antonin Bergeaud, Gilbert Cette and Rémy Lecat investigate a possible cause of the slowdown in growth in advanced economies since the 1970s.
They put forward a hypothesis in which falling long-term real interest rates, mainly pushed downwards by demographic
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