4 ms·
The proportion of the risk premium paid by poor people to the total total interest rate decreases with higher risk free interest rates.
by cjbgkagh 5y ago
The proportion of the risk premium paid by poor people to the total total interest rate decreases with higher risk free interest rates.
- jljljl 5y agoTrue, but I don’t see why that matters? They will still be paying higher rates, with likely lower incomes, and a principle whose real value does not diminish over time (since debts are held in nominal terms). If their debts were issued with fixed rates, then inflation would eventually reduce the Real cost of their interest as well.