More generally, r does not have to be constant and can be viewed as an average of expected present and future real rates of return
We illustrate that using lower real rates of return
would increase the present value of taxes and decrease the present value of benefits, thus making the two entitlement programs look less generous.
Long-term corporate and government bonds suffered four consecutive decades of negative real rates of return
beginning in the 1940s.
"Real rates of return
on safe assets have been declining relative to the real return on capital in the U.S.
He demonstrates that three factors--bottom-up versus top-down approach, equal nominal versus equal real rates of return
across assets, and 28 versus 14 reproducible assets--account for more than 90 per cent of the difference in growth in capital service inputs.
While quantitative easing has fuelled rising stock markets as investors seek out positive real rates of return
, a lack of real confidence means that they are quick to correct in the face of perceived negativity.
If the real cost of borrowing is negative the government could borrow in order to finance real capital projects, yielding positive real rates of return
Our extension seeks to include monetary considerations to extend Mulligan's analysis and assess the inter-linkages between monetary factors, real rates of return
over the long run, and short-run real consumption preferences.
Suppose we also assume that (i) money and capital pay either the same real rate of return or closely related real rates of return
(1) and (ii) the real return on money is the negative of the net inflation rate [pi].
Similarly, cash remains vulnerable to negative real rates of return
given that current levels of inflation exceed short-term deposit rates in much of the developed and developing world.
HANIF AJARI: Household or consumer savings depend on many complex factors, the most important being income levels, relative price stability and positive real rates of return