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Especially for rich people and for consumption (not investment) it looks obvious to me that they have negative time preference for consumption. Why? They could choose to consume all their money today to whatever they want (business jets, charity, space travel etc) and live rest of their lives in poverty if they face negative interest rates on their assets. That's what a positive time preference looks like. Of course, even when rates are negative, the rich people choose to live comfortably also in the future, even if their total consumption is slightly smaller. And as the wealth has been concentrating during the last decades more and more to the wealthy ones, the interest rate needs to reflect more and more the time preference of the wealthy ones. You want to get higher interest rates, you need to reverse the wealth concentration.

(All of the above is completely without source or further arguments or detailed analysis available, just my thoughts.)




To me this comes back to the "r > g" controversy: https://www.ft.com/content/e1b9254e-f476-11e3-a143-00144feab...

In order to earn a positive rate of return without simply taking wealth off others, the overall world economy has to grow. This growth appears to be slowing, and also significant concentrations of wealth are being stashed away (e.g. Chinese investers in Vancouver and other cities).

Not to mention the huge "negative growth" risks presented by climate change. There's going to be significant investment needed to reduce CO2 and/or mitigate the impacts of these, just to maintain the same level of economic output! An exogenous source of negative growth.

Basically the wealthy have to choose between negative interest rates, voluntary charity, wealth taxes, sudden confiscation, or invalidation of worth due to collapse. You can't take it with you, as the saying goes.




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