The natural rate of interest is the real short-term rate that supports an economy operating at its potential output without increasing inflation. It is an essential benchmark rate for policymakers who determine the policy rate. If potential output declines, the natural rate declines with it. However, we do not directly observe the natural rate. Instead, we have to rely on quantitative models that describe the policy and economic activity of the government, households, and firms to uncover the underlying natural rate of interest.
The left panel of the figure plots the U.S. natural rate of interest, as estimated by Holston, Laubach, and Williams (2017). The rate starts out slightly below 6 percent in the early 1960s and tends to trend downward during the period, generally increasing during expansions and decreasing during recessions. In the 2007-09 recession, however, the rate drops quickly and does not increase at all during the following expansion.
图中的左图显示了美国的自然利率，由Holston，Laubach和Williams（2017）估算。该利率在20世纪60年代初开始略低于6％，并且在此期间趋于下降，通常在扩张期间增加，在衰退期间减少。然而，在2007 - 09年的经济衰退中，利率在下一次扩张期间迅速下降并且根本没有增加。
What could be driving the long-run decline in the natural rate of interest? Over the past 30 years, demographics have changed in most developed countries as their populations have aged. This essay describes how changing demographics in the United States contribute to a decline in its natural rate.
The right panel of the figure shows three measures of U.S. demographic change: average life expectancy at birth (blue), the birth rate per 1,000 people (gray), and the old-age dependency ratio (orange), which is the population over age 65 divided by the population between ages 20 and 65. Since the 1960s, life expectancy in the United States has increased by more than eight years. At the same time, the birth rate per 1,000 people has declined drastically, from 23.4 births in 1961 to 12.4 in 2015. Longer lives and slower population growth mean an aging population.
An aging population can present challenges. The last metric in the right panel, the old-age dependency ratio, increased from 17 percent to just shy of 25 percent between 1961 and 2013. This increase puts a greater burden on the working-age population to support retirees. For example, the U.S. government supports retired individuals through payments such as Social Security. As the population ages, more individuals receive these payments than contribute toward them.
Impact on the Natural Rate of Interest
Demographics can affect the natural rate of interest through several channels. Remember, if potential output declines, the natural rate declines with it. An aging population and slowing population growth limit the supply of available workers in an economy. Therefore, holding labor productivity constant, a decrease in workers—a higher old-age dependency ratio—reduces the output generated by an economy. A smaller working-age population means fewer people with a lot of disposable income to consume. These factors decrease an economy's productive capacity and thereby lower the natural rate. U.S. labor force participation is up compared with the 1960s, despite a long decline since the mid-1990s. By itself, this rising labor force participation would tend to raise the natural rate by increasing productive capacity and, in turn, the natural rate of interest.
人口统计数据可以通过多种渠道影响自然利率。请记住，如果潜在产出下降，自然利率会随之下降。人口老龄化和人口增长放缓限制了经济中可用工人的供应。因此，保持劳动生产率不变，工人减少 - 老年抚养比率提高 - 减少了经济产生的产出。较少的工作年龄人口意味着拥有大量可支配收入的人数较少。这些因素降低了经济的生产能力，从而降低了自然利率。尽管自20世纪90年代中期以来经历了长期下降，但美国劳动力参与率与20世纪60年代相比有所增加。劳动力参与率的提高往往会通过提高生产能力来提高自然率，反过来，自然利率也会提高。
An aging population also impacts the natural rate of interest through the savings rate. A higher savings rate increases the supply of loanable funds that banks can lend out, therefore decreasing interest rates. As life expectancy increases, the time individuals spend in retirement increases as does the amount of money they will need to last through retirement. If working-age individuals believe social safety nets will fail, they are likely to save more to offset the risk.2 The U.S. savings rate did increase somewhat from 2005 to 2008; however, for the most part, U.S. household savings has declined since the 1970s.
Changing U.S. demographics can decrease the productive capacity of the economy through slowing labor force participation and population growth. Holding labor productivity constant, slowing participation and population growth lower potential gross domestic product (GDP) and the natural rate of interest. The natural rate could also be lower because of increased saving; however, Americans are saving less than they did 30 years ago. Most likely, changing U.S. demographics are reducing the U.S. natural rate of interest by decreasing potential output.