Quarterly Review
Determinants of Long-Term Interest Rates: An Empirical Study of Several Industrial Countries
Winter 1991Volume 16, Number 4

Authors: Howard Howe and Charles Pigott

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 rise—the rate of return to capital, risk factors, and changes in financial structure—along with macroeconomic policies leading to short- and medium-term fluctuations in the rates.

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