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One might argue about the relative value of interest rates vs risk, but all lending incurs risk. Maybe very little, but non-zero.
by jaredhallen 3y ago
One might argue about the relative value of interest rates vs risk, but all lending incurs risk. Maybe very little, but non-zero.
- JackFr 3y agoBut as an academic exercise, you can stipulate risk free lending as axiomatic, and still see that a natural interest rate comes from different inter temporal marginal preference for money among entities in the economy. It’s only zero if everyone’s preference is identical.
- ahepp 3y agoNonetheless, I think you can derive a “time value of money” from the data?