Real long-term interest rates are crucially determined by saving and investment decisions made by households and enterprises. And even in an imaginary world without a financial sector, a rate of interest would emerge.
Indeed, beyond the recent period of low interest rates, we have witnessed a considerable decline in real yields on long-term government bonds in major advanced economies since the start of the 1980s. Owing to its persistence and outreach, this decline is often attributed to secular or global forces.