A Quote by Murray Rothbard
One grave and fundamental Keynesian error is to persist in regarding the interest rate as a contract rate on loans instead of the price spreads between stages of production. The former, as we have seen, is only the reflection of the latter.
Quote Topics
Quote Author
Related Quotes
When they so-called 'target the interest rate', what they're doing is controlling the money supply via the interest rate. The interest rate is only an intermediary instrument.
The IMF insisted that both Russia and Brazil maintain their currency at over-valued levels. Who are you protecting when you try to maintain that exchange rate by having high interest rates? You're protecting domestic and foreign firms that have gambled on the exchange rate. And who is paying the price? The small businesses that did not gamble [and no longer can afford loans], the workers who are going to be put out of jobs.
Our tree is actually a tree of the short-term interest rate. The average direction in which the short-term interest rate moves depends on the level of the rate. When the rate is very high, that direction is downward; when the rate is very low, it is upward.
The brain has a good error rate. But, the point is, you can function with that error rate. Animals do a lot of guesswork.
Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.
A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.
The insurance companies do not refer to the key policy rate when they send their statements. We can only control that rate. Long-term interest rates are determined largely by global financial markets.
If we speak about fundamental things, regulation of the rate is actually the function of the main regulator, namely the function of the Central Bank. And it should think of how the economy and industry react, but also of its fundamental tasks in order to ensure the stability of the rate.
Profits in business always depend on the rate of interest: the higher the interest, the higher the rate of profit required.
In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment.
As a beneficiary of the carried interest loophole, I've seen firsthand the lack of any difference between the work involved in generating a carried interest and the work done by millions of other professionals who are taxed at the full 35 percent rate.
A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.
You might lose your spontaneity and, instead of composing first-rate Gershwin, end up with second rate Ravel.
Imagine you have six loans, small to huge. People want to close loans and because of that, they try to pay off the small loans, but that's not the right strategy. The right strategy, of course, is to pay the loan with the highest interest rate. People make this mistake and it costs them lots and lots of money, it's a very expensive mistake because interest rates accumulate and become very, very expensive very quickly.
As soon, however, as capitalist competition has definitively established the equal rate of profit, that rate becomes the starting point for the calculations of the capitalists in the investment of capital in newly-created branches of production.
What central banks can control is a base and one way they can control the base is via manipulating a particular interest rate, such as a Federal Funds rate, the overnight rate at which banks lend to one another. But they use that control to control what happens to the quantity of money. There is no disagreement.
Related Authors
Adam Smith Quotes
Scottish
Economist
Alan Greenspan Quotes
American
Economist
Benjamin Graham Quotes
American
Economist
Friedrich August von Hayek Quotes
Austrian
Economist
John Kenneth Galbraith Quotes
American
Economist
John Maynard Keynes Quotes
English
Economist
Joseph Stiglitz Quotes
American
Economist
Ludwig von Mises Quotes
Austrian
Economist
Milton Friedman Quotes
American
Economist
Muhammad Yunus Quotes
Bangladeshi
Economist
Paul Craig Roberts Quotes
American
Economist
Paul Krugman Quotes
American
Economist
Richard Thaler Quotes
American
Economist
Robert Reich Quotes
American
Economist
Thomas Sowell Quotes
American
Economist
Walter E. Williams Quotes
American
Economist