| Author: | Hak Choi | ISBN: | 1230002385174 |
| Publisher: | Hak Choi | Publication: | June 19, 2018 |
| Imprint: | Language: | English |
| Author: | Hak Choi |
| ISBN: | 1230002385174 |
| Publisher: | Hak Choi |
| Publication: | June 19, 2018 |
| Imprint: | |
| Language: | English |
What is interest rate? Irving Fisher said it is impatience, but his implication of constant consumption means no growth. Martin Feldstein said it is profit rate, but unlike interest rate, profit rate has no guarantee. Böhm-Bawerk said it is the cost of producing capital, but if so, does buying machine carry no interest? Keynes said it is the price for holding cash, and that helped him derive some demand function. But then, the corresponding bank’s demand must be positive. Paul A. Samuelson said it is population growth rate, and some less developed countries seem to confirm such relationship, but then why do developed countries with zero population growth still have interest rate policy? Since no body knows exactly what interest rate is, Modigliani & Miller advocated borrowing, Samuelson recommended switching and re-switching of capital-labor combination, while Knut Wicksell advocated raising wage rate. Why it is so difficult to handle this little number? Without understanding interest rate, how can one run banking business? How can one speculate?
What is interest rate? Irving Fisher said it is impatience, but his implication of constant consumption means no growth. Martin Feldstein said it is profit rate, but unlike interest rate, profit rate has no guarantee. Böhm-Bawerk said it is the cost of producing capital, but if so, does buying machine carry no interest? Keynes said it is the price for holding cash, and that helped him derive some demand function. But then, the corresponding bank’s demand must be positive. Paul A. Samuelson said it is population growth rate, and some less developed countries seem to confirm such relationship, but then why do developed countries with zero population growth still have interest rate policy? Since no body knows exactly what interest rate is, Modigliani & Miller advocated borrowing, Samuelson recommended switching and re-switching of capital-labor combination, while Knut Wicksell advocated raising wage rate. Why it is so difficult to handle this little number? Without understanding interest rate, how can one run banking business? How can one speculate?
