A Post Keynesian View of Theories and Causes for High Real Interest Rates

Louise Davidson

Chapter 23 in Money and Employment, 1990, pp 342-364 from Palgrave Macmillan

Abstract: Abstract The doctrine of monetarism had tended to dominate economic discussions regarding inflation and economic policy — even when the facts, since 1980, have shown there is very little correlation between growth in the domestic money supply and consumer price increases. Considerable time and energies are still being expended, and in my view wasted, trying unsuccessfully to provide a cogent policy analysis of real world problems in the face of the popularity of unhelpful monetarist concepts. The concept of the ‘real rate of interest’ is an excellent case in point. Accordingly, if we are to have a useful discussion regarding why ‘real’ interest rates internationally have risen so dramatically since 1979, we must first clarify the theoretical meaning of the real rate of interest. For until we get our ‘theory’ right, it is impossible to get a good diagnosis of real world ‘facts’, the problems implicit in these ‘facts’, and possible policy actions.

Keywords: Interest Rate; Real Interest Rate; Real Rate; Nominal Interest Rate; Spot Market (search for similar items in EconPapers)
Date: 1990
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11513-6_24

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349115136

DOI: 10.1007/978-1-349-11513-6_24

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().