Interest Rate Control

Cem Eyerci

Chapter Chapter 5 in The Causes and Consequences of Interest Theory, 2021, pp 67-86 from Springer

Abstract: Abstract Interest is the price of loaned capital, and its regulation is a sort of price control. Hence, this chapter reviews the concept of price control and its mechanism as price ceilings and floors. It presents the probable consequences of various price control regulations, such as the limited price of a show, rent controls, maximum rail fares, regulated prices of consumer goods, minimum wage, and minimum unit price for an alcoholic beverage. The chapter introduces Steven Cheung’s price control model, which applies to any price control regulation by the proposed methodology that helps to investigate the relevant constraints of any price control rather than explaining the implications of a specific control. It reviews the consequences of interest rate regulations on various markets, the borrowers and lenders, and the whole economy in aspects of the efficient use of the capital, competition in the loan market, savings, investment, output, employment, and growth.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-78702-8_5

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DOI: 10.1007/978-3-030-78702-8_5

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