The Real Rate of Interest: A Theoretical Analysis
AbstractA theoretical view of the real rate of interest, such as is provided by models of economic growth, is presented. That question is of compelling interest, even though the issues are so long-run as to be of little practical importance. Models reviewed include the Solow model, and its disaggregated extension by Stiglitz; endogenous growth models; the Ramsey model; and the Diamond capital model. All these models are less than fully adequate to answer key questions. Solow-type models are good at demonstrating the influence of grand changes, such as alterations in saving rates, or demographic changes. However key variables--particularly the saving rate--are treated as constants. The Ramsey model, on the other hand, assumes in effect that a major influence on the real rate is a given impatience parameter. The Diamond model is ideal for economies dominated by pension fund saving, but does not describe any actual economy. Copyright 1999 by Oxford University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Review of Economic Policy.
Volume (Year): 15 (1999)
Issue (Month): 2 (Summer)
Contact details of provider:
Web page: http://oxrep.oupjournals.org/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Robert Becker, 2011.
"Optimal Growth with Heterogeneous Agents and the Twisted Turnpike: An Example,"
Caepr Working Papers
2011-008, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Robert A. Becker, 2012. "Optimal growth with heterogeneous agents and the twisted turnpike: An example," International Journal of Economic Theory, The International Society for Economic Theory, vol. 8(1), pages 27-47, 03.
- Ito, Hiro, 2003.
"Was Japanâ€™s Real Interest Rate Really Too High During the 1990s? The Role of the Zero Interest Rate Bound and Other Factors,"
Santa Cruz Center for International Economics, Working Paper Series
qt48k5q6vd, Center for International Economics, UC Santa Cruz.
- Ito, Hiro, 2003. "Was Japanâ€™s Real Interest Rate Really Too High During the 1990s? The Role of the Zero Interest Rate Bound and Other Factors," Santa Cruz Department of Economics, Working Paper Series qt48k5q6vd, Department of Economics, UC Santa Cruz.
- Christian Upper & Andreas Worms, 2003. "Real long-term interest rates and monetary policy: a cross-country perspective," BIS Papers chapters, in: Bank for International Settlements (ed.), Monetary policy in a changing environment, volume 19, pages 234-257 Bank for International Settlements.
- Bliss, Christopher, 2004. "Koopmans recursive preferences and income convergence," Journal of Economic Theory, Elsevier, vol. 117(1), pages 124-139, July.
- Bonatti, Luigi, 2005. "Growth and employment differentials under alternative wage-setting institutions and integrated capital markets," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 724-746, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.