Selection, patience, and the interest rate

Radoslaw Stefanski; Alex Trew

doi:10.1086/727798

Selection, patience, and the interest rate

Radoslaw Stefanski
, Alex Trew

Research output: Contribution to journal › Article › peer-review

Abstract

The interest rate has been falling for centuries. A process of natural selection that leads to increasing societal patience is key to explaining this decline. Three observations support this mechanism: patience varies across individuals, is intergenerationally persistent, and is positively related to fertility. A calibrated dynamic, heterogeneous-agent model of fertility permits us to isolate the quantitative contribution of this mechanism. We find that selection alone is the key to explaining the decline of the interest rate.

Original language	English
Pages (from-to)	149-181
Number of pages	33
Journal	Journal of Political Economy Macroeconomics
Volume	2
Issue number	1
Early online date	8 Feb 2024
DOIs	https://doi.org/10.1086/727798
Publication status	Published - 1 Mar 2024

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10.1086/727798

Trew_2023_Selection_patience_and_JPEM_AAM_CCBY
Copyright © 2024 The University of Chicago. All rights reserved. This work has been made available online in accordance with the Rights Retention Strategy This accepted manuscript is distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. The final published version of this work is available at https://doi.org/10.1086/727798.
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Quantifying the Cultural Roots of the Industrial Revolution
Stefanski, R. (PI)
Google Cloud
10/02/26 → 10/02/27
Project: Standard

Replication Data for: "Selection, Patience, and the Interest Rate"
Stefanski, R. (Creator) & Trew, A. (Contributor), Harvard Dataverse, 13 Sept 2023
DOI: 10.7910/dvn/ugwohh
Dataset

1 Article
1 Discussion paper

Cultural capital and the productivity of ideas: evidence from historical texts
Stefanski, R., 23 Jul 2026, Online: University of St Andrews, Business School, p. 1–86, 86 p. (Economics discussion papers (St Andrews); no. 2602).
Research output: Working paper › Discussion paper
Patience and the social discount rate
Stefanski, R. & Trew, A., 24 Sept 2026, (E-pub ahead of print) In: National Institute Economic Review. FirstView, p. 1-11
Research output: Contribution to journal › Article › peer-review

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title = "Selection, patience, and the interest rate",

abstract = "The interest rate has been falling for centuries. A process of natural selection that leads to increasing societal patience is key to explaining this decline. Three observations support this mechanism: patience varies across individuals, is intergenerationally persistent, and is positively related to fertility. A calibrated dynamic, heterogeneous-agent model of fertility permits us to isolate the quantitative contribution of this mechanism. We find that selection alone is the key to explaining the decline of the interest rate.",

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Selection, patience, and the interest rate

Abstract

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Quantifying the Cultural Roots of the Industrial Revolution

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Replication Data for: "Selection, Patience, and the Interest Rate"

Research output

Cultural capital and the productivity of ideas: evidence from historical texts

Patience and the social discount rate

Cite this