02071cas a2200241 a 4500 AALejournalIMF017599 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475595826 1018-5941 BD-DhAAL BD-DhAAL Nozaki, Masahiro. Long-Run Biological Interest Rate for Pay-As-You-Go Pensions in Advanced and Developing Countries / Masahiro Nozaki. Washington, D.C. : International Monetary Fund, 2017. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students How much of an internal rate of return would a sustainable pay-as-you-go pension system offer current and future generations equally? The answer is the sum of the Long-Run Biological Interest Rates (LBIR), the real-world equivalent of Samuelson's (1958) biological interest rate, and future productivity growth. Reflecting global population ageing, the median LBIR across 172 countries is as low as 1 percent per year. The LBIRs are particularly low in advanced countries, estimated to be negative in many of them, and require ample financial reserves today or future productivity growth to maintain participation in pension schemes. On the other hand, the LBIRs in less developed regions, such as in sub-Saharan Africa, are relatively high, indicating a potential to use a pay-as-you-go scheme to expand the coverage of public pensions. Raising the retirement age by five years brings up the LBIR by 40 basis points, significantly improving the long-run budget constraint of a pension scheme. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2017/098 Full text available on IMF http://elibrary.imf.org/view/journals/001/2017/098/001.2017.issue-098-en.xml IMF e-Library