drop of around 14 percentage points, and 10 - year bonds saw a decline of 13 percentage points. during this same period, inflation also fell, albeit to a lesser degree, leading to real rate declines of about 5 and 4 percentage points for the 2 - and 10 - year bonds, respectively, putting sovereign real interest rates close to zero and even in negative territory for some periods. the decline was not limited to sovereign bond rates ; it was also present in the returns on other so - called " safe " assets. importantly, this downward trend was not exclusive to the united states. real long - term rates have declined by several percentage points since the early 1980s in both developed and emerging economies, so this appears to be a global phenomenon. the global downward trend in observed risk - free rates over an extended period suggests a significant decline in the natural interest rate, often referred to as the " longrun " equilibrium rate. this secular decline has coincided with a relatively stable trajectory in the marginal product of capital, a stable trajectory on the returns on risky assets, and a stable trajectory in the investment rate, particularly in advanced economies. as a result, these patterns are often attributed to factors that have increased the overall supply of savings over the years, alongside factors that have 2 / 5 bis - central bankers'speeches redirected this excess in savings toward the demand for safe assets rather than productive investments. in recent years, much of the literature has centered on the hypothesis of a " global saving glut. " this theory suggests that a significant excess of savings from certain countries and affluent groups has led to a marked shift toward safe assets. consequently, there has been a notable increase in the prices of these assets, accompanied by a decline in interest rates. one contributor to this phenomenon was the increased savings from emerging economies, particularly since the 1990s. factors such as robust economic growth, soaring commodity prices, and high risk aversion all fueled greater savings in these regions. as a result, these economies channeled substantial portions of their savings into global markets, with a significant impact on interest rates in developed countries. another contributor to this saving glut was the increasing savings rates among the wealthiest households in developed nations. as income inequality has risen, rich households have saved a larger share of their income, further contributing to the excess savings phenomenon. research indicates that the savings of the top 1 % in the united states is comparable to the savings generated by the excess from emerging markets, a trend the literature refersto as

, and harrison shieh. their paper analyzes macroeconomic data from advanced and emerging economies in the 1980s and 2020s to highlight differences in how u. s. monetary policies have impacted emerging markets in these two distinct periods. the second paper in this session, by francisco legaspe and liliana varela, will show how country - specific risks, such as political uncertainty and risk on debt repayment explain excess returns from investing in local currency assets in latam countries. finally, a policy panel featuring elias albagli, jean - marc natal, boris hofmann, and ricardo reis will offer insights into the future of interest rates and their implications for monetary policy in emerging economies. 5. acknowledgements i would like to especially thank atif mian for being the external organizer of this conference, as well as locals sofia bauducco, mariana garcia and lucciano villacorta for putting togethersuch a wonderful program. i also thank all the speakers and contributors and look forward to the conference volume that we will publish in some months with its formatted contents. let me finish by thanking maria jose reyes, constanza martinelli, carolina besa, daniela gaete, daphne guiloff, pablo barros, and both the public affairs department and the economic research department of the central bank of chile for all their invaluable help managing the logistics of organizing this annual conference. i wish you a fruitful discussion over the next two days. thank you. 5 / 5 bis - central bankers'speeches