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The Rate of Interest, the Bank Rate, and the Stabilization of Prices

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  • Gustav Cassel

Abstract

Relative prices and the absolute height of prices. — Interest as a price, 512. — The equilibrium rate of interest is a price; how it is determined, 513. — The absolute height of prices, 515. — The bank rate, 516. — Stability of prices is possible only when the bank rate is the same as the equilibrium rate, 517. — No other device is adequate, 519. — The gold standard does not bring stability of prices, 520. — A manipulated bank rate may mitigate the instability, but with disturbing effects, 521. — Some explanations: special conditions of a progressive society; various kinds of interest rates; how the rate of interest affects prices, 523. — Dynamic as contrasted to static conditions; cyclical movements; futility of mathematical wave theories, 526.

Suggested Citation

  • Gustav Cassel, 1928. "The Rate of Interest, the Bank Rate, and the Stabilization of Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 42(4), pages 511-529.
    • Handle: RePEc:oup:qjecon:v:42:y:1928:i:4:p:511-529.
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    Citations

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    Cited by:

    1. Athanasios Orphanides & John C. Williams, 2002. "Robust Monetary Policy Rules with Unknown Natural Rates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 63-146.
    2. Anthony J Evans, 2020. "The natural rate of interest: An estimate for the United Kingdom," Economic Affairs, Wiley Blackwell, vol. 40(1), pages 24-35, February.
    3. Wakita, Kazumi & Shen, Zhonghua & Oishi, Taro & Yagi, Nobuyuki & Kurokura, Hisashi & Furuya, Ken, 2014. "Human utility of marine ecosystem services and behavioural intentions for marine conservation in Japan," Marine Policy, Elsevier, vol. 46(C), pages 53-60.
    4. João Sousa Andrade, 2004. "Régimes Monétaires et Théorie Quantitative du Produit Nominal au Portugal (1854 1998)," Notas Económicas, Faculty of Economics, University of Coimbra, issue 20, pages 63-88, December.
    5. Pavel Potužák, 2018. "Price Level Stabilization: Hayek contra Mainstream Economics," Prague Economic Papers, Prague University of Economics and Business, vol. 2018(4), pages 449-478.
    6. Milan Zafirovski, 2024. "Distributive justice revisited in a comparative setting: the fairness of wages in OECD countries and modalities of society," SN Business & Economics, Springer, vol. 4(1), pages 1-44, January.
    7. Hogan, Thomas L. & White, Lawrence H., 2021. "Hayek, Cassel, and the origins of the great depression," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 241-251.
    8. Alfonso Palacio-Vera, 2006. "On Lower-bound Traps: A Framework for the Analysis of Monetary Policy in the ÒAgeÓ of Central Banks," Economics Working Paper Archive wp_478, Levy Economics Institute.
    9. repec:onb:oenbwp:y::i:128:b:1 is not listed on IDEAS
    10. repec:prg:jnlpep:v:preprint:id:668:p:1-30 is not listed on IDEAS
    11. Ulrich Bindseil & Philipp J. König, 2013. "Basil J. Moore's Horizontalists and Verticalists: an appraisal 25 years later," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(4), pages 383—390-3, October.

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