Two Views of Global Equilibrium: Interest Rates ...
World Interest Rates US deficit/RoW savings 3% 4.5% 0.01% 6% 4.5% 0.04% 12% 4.2% 0.2% Table 3. Savings and real interest rates in the benchmark case. Evidently, stochastic endowments for the RoW do lead to some lowering of world interest rates and some increase in the US deficit as the theory predicts: but with log preferences the quantitative ... ................
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