-
So I understand the basic premise of the saving-based interest rate theory, which is very logical. The more savings, the cheaper the price of credit is, since credit comes from savings. It's basic supply and demand. Now, I can see how this is a good thing. The cheaper the credit, the easier the investments...
-
The bolded might help the most for your particular question, but these all provide great insight into what interest is and what it does, and how the manipulation of it affects the economy. Articles: The Phenomenon of Interest The Nature of Interest The Unlimited Power of Suppressing the Interest Rate...
-
I'm in the interest rate chapter of Man, Economy, and State, and I am confused to how the interest rate gets determined. If the market was only the two people that he speaks of in section 3 (of CH 6), what would they land on for their equilibrium interest rate? The diagrams are linked here (page...
-
I'm reading Man, Economy, and State and I'm at the determination of the pure rate of interest (Ch 6 Section 3). I'm having trouble wrapping my mind around how Rothbard has set up the value scales for present to future goods (pg 380 in the 2nd edition of the Scholar's edition, the one...
-
50% of its current value? less? more? why?
-
FED came into existance in 1913 for the purpose of controlling the money supply by lending to banks at higher or lower interest rates. I just read from wikipedia that this interest after expenses goes to the treasury. I think this interest must be a LOT. What does the treasury do with this amount? Case...
-
No one has replied to this yet, so I thought I would give it a bump. Thanks for any insight that you can provide. David
-
Austrians claim that the interest rate is determined by the time preferences of individuals on the market. But what is the Austrian understanding of how existing interest rates influence peoples' time preferences? For example, if the interest rate is at a certain level and then increases or decreases...
-
Wealth is exchanged on a daily basis without regards to compensation. Individuals exchange monetary assets for goods and services and then proceed to wait for the return of their change. While this process takes place there is a surplus and a deficit of wealth that remains stagnate. Let me offer an example...
-
I am new to economics and have encountered a problem with theory. When interest rates rise this is said to reduce AD, how does this happen because surely what is not spent is saved and hence invested?