Some changes, such as the variations in the subjective criteria of propensity to save associated with the extension of life expectancy, fall within what economics calls exogenous changes and therefore little influenced by public policies. Others may instead be triggered by public policies, in the absence of which real interest rates would probably have fallen even further in recent decades. Among the policies that most influence the supply of savings are certainly those linked to pension systems. The introduction of public pension systems alters saving choices, activating three effects: the wealth replacement effect, the effect of bringing forward the retirement age and the inheritance effect.
If the characteristics remained unchanged
Compared to today’s with a growing share of pensioners. There would be intergenerational transfers that would tend to crowd out private savings. “ The speed with which real interest rates rise from the current historically low level could be influenced by structural interventions. Fiscal policies that encourage an extension Lebanon Phone Number List of the retirement age and promote innovation and investment in research and development. As Ferrero explains, Gross and Neri , three economists in the work, On secular stagnation and low interest rates: Demography matters. In the European Union there are two further channels which, through public policies, tend to act on the demand for savings: those connected to the “Next Generation EU” and those attributable to the ” 2021-27 Multi annual Financial Framework.
The multi-annual budget of the Union itself
Which is approved for a period of at least five years. Although connected. Next Generation EU and the multiannual framework are to be considered in all respects as two different instruments. Faced with the aging of the population. These policies could support investments by encouraging. The use of digital Turkey WhatsApp Number List and automation technologies by replacing the missing workforce. From a theoretical point of view. A change that can reduce the relative scarcity of the labor factor compared to capital could reverse the trend. As Mario Draghi already noted years ago. In a situation where, for structural reasons such as demographic ones, savings are increasingly less involved in investments. The most concrete way to raise real interest rates would be through increases in the demand for capital.
