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Showing posts with label Interest Rate Formation. Show all posts
Showing posts with label Interest Rate Formation. Show all posts

Sunday, October 29, 2017

Social Structure And The Determination Of Interest Rates


In The Reformation of Economics, Philip Pilkington argues that societal structure determines the power of creditors and therefore interest rates. He then attacks mainstream financial and economic theories about interest rate formation. Although I agree that institutions matter for the determination of the power of creditors, I see mainstream theories of interest rate formation as adequate within the current institutional structure of developed countries. (Link to my review of The Reformation in Economics.)