I take it this is good news? Or will it arrive too slowly?
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.
That is from a new paper by Radoslav Stefanski and Alex Trew. Via the excellent, patient Kevin Lewis.
The post Selection, Patience, and the Interest Rate appeared first on Marginal REVOLUTION.
Comments
Post a Comment