In order for the government to borrow money, they would need to provide an incentive for the savers to lend. Example, if you want to borrow from me what incentive would I have to lending you my money?
--- john hull <[EMAIL PROTECTED]> wrote: > For some reason, I can't get it straight in my head > why the risk-free rate of interest would be higher > than zero. > > Does it really come from the fact that some people > wish to consume today but can't, so they purchase > current consumption from suppliers, i.e. lenders, > and > the interest rate is just the price in that > particular > market? Or is there something different, or deeper, > or whatever going on? > > > > __________________________________ > Do you Yahoo!? > Free Pop-Up Blocker - Get it now > http://companion.yahoo.com/ __________________________________ Do you Yahoo!? Free Pop-Up Blocker - Get it now http://companion.yahoo.com/