Demographics and Interest Rates in Asia
24 Pages Posted: 22 Aug 2018
Date Written: July 2018
Demographic developments have been regarded as one important cause of the long-termmovement in global interest rates. This paper provides empirical evidence of therelationship between demographics and interest rates over a wide sample of advanced andemerging market economies. It also finds that capital account openness limits the directsensitivity of a country's interest rates to its own demographics. The results suggest thatfuture demographic developments will continue to apply downward pressure on theinterest rates in Asia which foresees a rapid aging.
Keywords: demographics, interest rates, capital account openness
JEL Classification: E20, F30, J10
Suggested Citation: Suggested Citation