Capital will not become more expensive as the world ages [electronic resource] / Maurizio Bussolo [and others].
"Aging of populations and convergence between developed and developing countries in per capita incomes are shaping the evolution of saving, investment, capital flows, and, in particular, the cost of capital. When considering these trends, the existing literature argues for either continued, low...
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| Online Access: |
Full Text (via Open Knowledge Repository) |
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| Corporate Authors: | , |
| Other Authors: | , , , |
| Format: | Electronic eBook |
| Language: | English |
| Published: |
Washington, D.C. :
The World Bank,
2014.
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| Series: | Policy research working papers ;
6989. |
| Subjects: |
| Summary: | "Aging of populations and convergence between developed and developing countries in per capita incomes are shaping the evolution of saving, investment, capital flows, and, in particular, the cost of capital. When considering these trends, the existing literature argues for either continued, low interest rates, or sharply rising ones. This paper presents an alternative view: modest rises in interest rates, which result from a combination of increases in the global weight of high-saving developing economies (limiting declines in global saving), and decelerations in the rate of growth in developing countries (constraining upward pressure in global investment). For the majority of countries, slowing capital demand resulting from decelerating growth, coupled with structural changes that influence its attractiveness as a destination for capital, moderate increases in interest rates. Changes in key assumptions do not alter this view. More specifically, the small rise in interest rates persists even in a scenario where growth in developing countries decelerates more slowly, or when elasticities governing the behavior of saving and investment are varied"--Abstract. |
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| Item Description: | "Development Prospects Group, Global Modeling and Analytics Unit." "Europe and Central Asia Region, Office of the Chief Economist." |
| Physical Description: | 1 online resource (44 pages) : illustrations. |
| Bibliography: | Includes bibliographical references (pages 28-32). |
| Source of Description, Etc. Note: | Online resource; title from pdf title page (World Bank.org Web site, viewed Jan. 13, 2015). |