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Discover Latest #Real interest News, Articles and Videos with Contenting
Real interest rate is the rate of interest an investor, saver or lender receives (or expects to receive) after allowing for inflation. It can be described more formally by the Fisher equation, which states that the real interest rate is approximately the nominal interest rate minus the inflation rate. Real interest rates are important because they measure the real return on investments. They are used to compare the effectiveness of investments in different countries, since the nominal interest rate does not take into account the effect of inflation. 1. "Real Interest Rates: A Primer" This article provides an overview of real interest rates, including how to calculate them, their importance, and their impact on investments. It also discusses the different types of real interest rates and their uses. 2. "What is the Real Interest Rate?" This article explains what the real interest rate is and why it matters. It also provides an overview of how real interest rates are calculated and used. 3. "Real Interest Rates: What Investors Need to Know" This article provides an overview of real interest rates and their importance for investors. It discusses how to calculate real interest rates, their impact on investments, and their uses.
Cowen's Third Law, illustrated - Marginal REVOLUTION
We further show that demographic and productivity factors do not represent convincing drivers of real interest rates over long spans. That is from a new AER piece by Kenneth S. Rogoff, Barbara Rossi, and Paul Schmelzing. Here are less gated copies of the piece. Here are some MR posts on Cowen’s Third Law.
Finally, exchange rate models seem to work pretty well - Marginal REVOLUTION
Exchange-rate models fit very well for the U.S. dollar in the 21st century. A “standard” model that includes real interest rates and a measure of expected inflation for the U.S. and the foreign country, the U.S. comprehensive trade balance, and measures of global risk and liquidity demand is well-supported in the data for the U.S. […]
Will transformative AI raise interest rates? - Marginal REVOLUTION
We want to know if AGI is coming. Chow, Halperin, and Mazlish have a paper called “Transformative AI, Existential Risk, and Real Interest Rates” arguing that, if we believe the markets, it is not coming for some time. The reasoning is simple. If we expect to consume much more in the future, and people engage […]
Some Links - Cafe Hayek
TweetRobert Pozen explains that Trump’s tariffs will repel foreign portfolio investment in the United States and thus – among other harms – raise real interest rates. Two slices: The Trump administration says this week it will impose reciprocal tariffs on countries that have regularly run substantial trade surpluses with the U.S. But these surpluses have […]
Turkey fact of the day - Marginal REVOLUTION
Real interest rates, which subtract inflation from central bank policy rates, have been negative for a remarkable 13 of the 22 years that Erdoğan has been in power, according to FT research. This helped spur growth, boost incomes and sustain a construction boom. It also laid the foundation for an economic crisis. By late 2022, […]
Sunday assorted links - Marginal REVOLUTION
1. AI and government debt. If real resources go up enough (a big if, admittedly), I think we are set. I would not worry so much about the transfers embedded in real interest rates. Furthermore, the key issues are those of political economy, namely whether U.S. repayment remains credible. In the major scenarios, the debt-wealth […]