Abstract
Interest rates are fundamental to an understanding of financial institutions and markets. This chapter presents an analysis of why there are so many different rates of interest in an economy (the ‘spectrum’ of interest rates), and examines the theoretical determination of the general level of interest rates through classical loanable funds theory and Keynesian liquidity preference theory. Finally, the term structure of interest rates and theories of the underlying term structure are explained.
This is a preview of subscription content, log in via an institution to check access.
Preview
Unable to display preview. Download preview PDF.
References
Dodds, J.C. and Ford, J.L. (1974) Expectations, Uncertainty and the Term Structure of Interest Rates. Martin Robertson, London.
Llewellyn, D.T. and Tew, B. (1988) ‘The Sterling Money Markets and the Determination of Interest Rates’. National Westminster Bank Quarterly Review, February.
Copyright information
© 1991 Michael Pawley, David Winstone and Patrick Bentley
About this chapter
Cite this chapter
Pawley, M., Winstone, D., Bentley, P. (1991). Interest Rates. In: UK Financial Institutions and Markets. Palgrave, London. https://doi.org/10.1007/978-1-349-21660-4_3
Download citation
DOI: https://doi.org/10.1007/978-1-349-21660-4_3
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-55536-1
Online ISBN: 978-1-349-21660-4
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)