BoK paper links real interest rate to demographic shift
Higher life expectancy and lower birth rate exert downward pressure on rates, researchers find
The fall in the long-term real interest rate in South Korea can be partly attributed to shifts in demographic trends, such as higher life expectancy and lower birth rates, researchers at the country’s central bank have found.
The Bank of Korea paper, published on June 4, says the country’s real interest rate has steadily declined since the 1990s to around 0% in recent years. The real interest rate in this paper corresponds to “the concept of the natural rate of interest derived under the
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