Must-Read: Nick Bunker: What’s Behind the Decline in U.S. Interest Rates?

Must-Read: Nick Bunker explains Eggertsson, Mehrotra, and Robbins to us:

Nick Bunker: What’s Behind the Decline in U.S. Interest Rates?: “Eggertsson, Mehrotra, and Robbins decompose the roughly 4 percent decline in the natural rate of interest since 1970…

…The decline in mortality helped push down the natural rate by about 1.8%-points… [as] individuals had to save more for retirement, thus increasing the supply of savings…. Fewer children reduces the demand for loans… [another] 1.8%-point decline…. Slower productivity growth… 1.9%-points…. The increase in government debt… [+]2%-points…. The declining labor share… 0.5%-points… the declining price of capital goods… 0.4%-points)….Secular stagnation might be around for quite a time to come.