The demographic transition can affect the equilibrium real interest rate through three channels. An increase in longevity - or expectations thereof - puts downward pressure on the real interest rate, as agents build up their savings in anticipation of a longer retirement period. A reduction in...

The demographic transition can affect the equilibrium real interest rate through three channels. An increase in longevity -- or expectations thereof -- puts downward pressure on the real interest rate, as agents build up their savings in anticipation of a longer retirement period. A reduction in...