Advertisement

The General Theory of the Rate of Interest

  • John Maynard Keynes
Chapter

Abstract

We have shown in chapter  11 that, whilst there are forces causing the rate of investment to rise or fall so as to keep the marginal efficiency of capital equal to the rate of interest, yet the marginal efficiency of capital is, in itself, a different thing from the ruling rate of interest. The schedule of the marginal efficiency of capital may be said to govern the terms on which loanable funds are demanded for the purpose of new investment; whilst the rate of interest governs the terms on which funds are being currently supplied. To complete our theory, therefore, we need to know what determines the rate of interest.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • John Maynard Keynes
    • 1
  1. 1.CambridgeUK

Personalised recommendations