Natural and Market Rates of Interest and the Trade Cycle

John R. Presley

Chapter 9 in Robertsonian Economics, 1978, pp 152-164 from Palgrave Macmillan

Abstract: Abstract As has been hinted at on several occasions, an increasing number of economists from the early part of the 20th century onwards attempted to explain cyclical fluctuations in terms of a divergence between the natural and the market rate of interest. This stimulated Robertson to devote an article to an examination of this explanation of the cycle in 1934.1 This chapter begins with a brief historical picture of the distinction that has been made between natural and market rates of interest, it then explores the use made of this distinction by the Swedish and Austrian schools in explaining the cycle, and ends with Robertson’s own views on the natural rate of interest and its role in the cycle.

Keywords: Money Supply; Demand Curve; Natural Rate; Full Employment; Price Stability (search for similar items in EconPapers)
Date: 1978
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-03239-6_15

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DOI: 10.1007/978-1-349-03239-6_15

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