BIS paper looks at low returns on safe assets

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New research published by the Bank for International Settlements investigates why investors are willing to tolerate low and declining returns on safe assets when the return on capital remains relatively high and stable.

Authors Magali Marx, Benoît Mojon and François Velde use an overlapping generations model to study several potential causes of falling long-term real rates: demography, trend productivity and risk.

In the working paper, they say declining labour force and productivity growth

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