Details

Autor(en) / Beteiligte

• Weber, Ernst Juerg

Titel

The Role of the Real Interest Rate in U.S. Macroeconomic History

Ist Teil von

• The B.E. Journal of Macroeconomics, 2010-01, Vol.10 (1), p.7

Ort / Verlag

bepress

Erscheinungsjahr

2010

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• A BEJM Topics article. Abstract People who face adverse economic prospects save in order to maintain consumption. During wars and other periods of distress, the incentive to save was so strong that there would have been excess saving and a corresponding excess supply of commodities without a negative real interest rate. During the Great Depression, the interest rate mechanism failed to achieve macroeconomic equilibrium because the nominal interest rate could not fall further and deflation produced a positive real interest rate. The lesson from American economic history is that central banks should accept moderate inflation if an adverse political or economic shock causes consumer pessimism. Submitted: November 4, 2008 · Accepted: April 1, 2010 · Published: April 8, 2010 Recommended Citation Weber, Ernst Juerg (2010) "The Role of the Real Interest Rate in U.S. Macroeconomic History," The B.E. Journal of Macroeconomics: Vol. 10 : Iss. 1 (Topics), Article 7. DOI: 10.2202/1935-1690.1853 Available at: http://www.bepress.com/bejm/vol10/iss1/art7