We examine the implications of persistent low real interest rates and wage growth rates on individuals nearing retirement. We begin by reviewing the concept of r star – the long-term real, safe interest rate that is neither expansionary nor contractionary – and presenting recent estimates...

Using a life-cycle model, the authors examine the implications of persistent low real interest rates and low wage growth for individuals nearing retirement. Low returns and low wage growth are found to affect welfare substantially, often producing large compensating variations. Low economy-wide...

We examine the implications of persistent low real interest rates and wage growth rates on individuals nearing retirement. We begin by reviewing the concept of r star - the long-term real, safe interest rate that is neither expansionary nor contractionary - and presenting recent estimates...