Advanced economies may be trapped in a vicious circle of low interest rates and falling productivity, a working paper published by the Banque de France says.

In The circular relationship between productivity growth and real interest rates, Antonin Bergeaud, Gilbert Cette and Rémy Lecat investigate a possible cause of the slowdown in growth in advanced economies since the 1970s.

They put forward a hypothesis in which falling long-term real interest rates, mainly pushed downwards by demographic