It is hard to be truly confident about the future path of real interest rates. The reasons for their decades-long decline are not well understood or agreed upon. One school stresses an increased desire for saving. Demographic change is part of this story. As a large chunk of the rich world’s population approaches the end of their working lives, they seek to set aside more of their income for retirement. The integration of high-saving China into the world economy is another factor. In this view, long-term interest rates had to fall simply to clear the saturated global market for savings.[…]