Real interest rates on long-term financial assets play a central role in linking financial markets to the economy at large. Over the last fifteen years, these rates have risen steadily in the United States and some key foreign countries. The authors consider long-term forces contributing to this...

World financial markets have become substantially integrated over the last two decades. Contrary to widespread expectations, however, this integration has not led to any greater convergence of interest rates across countries. This article examines why convergence has not occurred and more...