The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Demographic developments have been regarded as one important cause of the long-term
movement in global interest rates. This paper provides empirical evidence of the
relationship between demographics and interest rates over a wide sample of advanced and
emerging market economies. It also finds that capital account openness limits the direct
sensitivity of a country's interest rates to its own demographics. The results suggest that
future demographic developments will continue to apply downward pressure on the
interest rates in Asia which foresees a rapid aging.