Stefanski, R. and Trew, A. (2024) Selection, patience, and the interest rate. Journal of Political Economy Macroeconomics, (doi: 10.1086/727798) (Early Online Publication)
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Abstract
The interest rate has been falling for centuries. A process of natural selection that leads to increasing societal patience is key to explaining this decline. Three observations support this mechanism: patience varies across individuals, is inter-generationally persistent, and is positively related to fertility. A calibrated dynamic, heterogenous-agent model of fertility permits us to isolate the quantitative contribution of this mechanism. We find that selection alone is the key to explaining the decline of the interest rate.
| Item Type: | Articles |
|---|---|
| Keywords: | Interest rates, selection, fertility, patience, heterogenous agents. |
| Status: | Early Online Publication |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | Trew, Professor Alex |
| Authors: | Stefanski, R., and Trew, A. |
| College/School: | College of Social Sciences > Adam Smith Business School > Economics |
| Journal Name: | Journal of Political Economy Macroeconomics |
| Publisher: | University of Chicago Press |
| ISSN: | 2832-9341 |
| ISSN (Online): | 2832-935X |
| Published Online: | 08 February 2024 |
| Copyright Holders: | Copyright © 2024 The University of Chicago |
| First Published: | First published in Journal of Political Economy Macroeconomics 2024 |
| Publisher Policy: | Reproduced in accordance with the publisher copyright policy |
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