Abstract
‘By a long-established convention the rate of discount or the short-term rate of interest is called the “price” of money, so that “dear money” means a high rate, “cheap money” a low rate’ (Hawtrey, 1938, p. 28n). By the time Hawtrey was writing, however, the meaning of cheap money was changing, as a result of changes in both economic theory and monetary policy, to include low long-term interest rates. In the late 20th century money has not often been cheap in either sense, so that cheap or cheaper money now usually refers simply to a fall in (real) interest rates.
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© 1989 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Howson, S. (1989). Cheap Money. In: Eatwell, J., Milgate, M., Newman, P. (eds) Money. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-19804-7_8
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