--- John Morrow [EMAIL PROTECTED] wrote:
By the way, there have been times and places where the measured real
interest rate was essentially zero; I think this happened in Japan in
the 1990s.
So the question is, why at the zero rate was there not greater demand to
borrow? The answer may well
In a message dated 12/7/03 4:03:55 PM, [EMAIL PROTECTED] writes:
So the question is, why at the zero rate was there not greater demand to
borrow? The answer may well be that the expected future inflation and
real
interest rates were highly uncertain, and the transaction costs of getting
and
--- Marko Paunovic [EMAIL PROTECTED] wrote:
OK. Then, as long as the expected profit from building a factory is
higher than zero, I would not lend the money at zero interest rate.
If at a zero rate of interest, the quantity of savings exceeds the quantity
of borrowings, savers would earn zero
I recall a Japanese econ grad student telling me that in fact real interest
rates were negative for some span and people were STILL saving in the late
nineties in Japan. He also blamed several bubbles at the time (notably,
real estate in Japan) on this. Interesting if true... (Anyone know the
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
On 2003-12-05, john hull uttered:
For some reason, I can't get it straight in my head why the risk-free
rate of interest would be higher than zero.
The easiest example I know of is, would you be happy saving all of your
income for the next year, without receiving a formidable compensation?
On 2003-12-05, john hull uttered:
For some reason, I can't get it straight in my head why the risk-free
rate of interest would be higher than zero.
The easiest example I know of is, would you be happy saving all of your
income for the next year, without receiving a formidable compensation?
today worth more than a dollar tomorrow?
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
--- Marko Paunovic [EMAIL PROTECTED] wrote:
In a risk-free
world I can't fail.
Risk-free interest is quite different from a risk-free world.
We need to assume the usual risky world, but a loan that is sure to be
repaid and with the interest sure to be paid, which US treasury bonds
currently
like a real
world... That is why I assumed we live in a risk-free world.
I guess the short answer to the question Why is a dollar today worth more
than a dollar tomorrow? is Because there are some people who know how to
take $1 today, transform it in $2 tomorrow and pay up to $1 for that.
Marko
10 matches
Mail list logo
