Interest Rate Theories

  • Ansgar BelkeEmail author
  • Thorsten Polleit

Introductory Remarks

The interest rate plays an important role in economics, especially so in monetary theory. It may therefore come as a surprise that a consensus has not (yet) emerged as far as the nature and the determinants of the interest rate are concerned. In fact, the nature of the interest rate phenomenon has remained subject to, at times controversial, debate. In his book Man, Economy and State, first published in 1962, Murray N. Rothbard wrote (2001, p. 389): “Perhaps more fallacies have been committed in discussions concerning the interest rate than in the treatment of any other aspect of economics.”

In a historic perspective, the dealing with and the examination of the interest rate phenomenon has actually always been strongly influenced by ideological and political considerations. For instance, the controversies of the Middle Ages over usury were by no means attempts to examine the nature of the interest rate. However, this changed with the work of the economists of the...


Interest Rate Euro Area Marginal Utility Time Preference Real Interest Rate 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  1. 1.Chair for MacroeconomicsUniversity Duisburg-Essen Faculty of Economics and Business Administration45117 EssenGermany
  2. 2.Frankfurt School of Finance & Management60314 Frankfurt am MainGermany

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