History of Interest Rates

 
 
 
 
Sidney Homer (1963), in his seminal history of interest rates, argues that such a history of often dramatic interest rate fluctuations provides an excellent summary of the success of some communities and the failures of others to develop effective commercial ethics and laws and suitable monetary and fiscal techniques and policies. While "credit" is considered a modern device (or vice), a brief survey of financial history will demonstrate that credit was in general use in ancient and in medieval times, antedating industry, banking and even coinage. It is the purpose of this brief report to examine selected issues related to the history of simple and compound interest rates, specifically on loans, and to consider periods when high rates were commonplace in their historical context.

Gwartney and Stroup (1990) define the interest rate as the price paid for the use of money or loanable funds for a period of time. Interest is stated as a percentage of the amount borrowed; for example, an interest rate o 10 percent means that the borrower pays 10 cents annually for each dollar borrowed. This, of course, is a "simple interest rate" in which the total interest is a straightforward percentage of the whole sum borrowed. Compound interest, on the other hand, refers to the practice of paying interest on an amount loaned or invested (generally in a bank or other savings vehicle), and then paying interested on the combined principal sum and interest

     
 
 
 
    

 

Related Essays

A Brief Analysis of the History of the Federal Reserve System from .... close rein on the money supply and its attendant correlation of interest rates and inflation .... A Growing Debate The history of the Fed since 1967 has been one of .... (1275 5 )

Federal Reserve System, History, Structure, Function .... By 1933 the country had suffered the worst banking panic in its history. .... aide of the Treasury to facilitate borrowing money at low interest rates (DeRosa, 1981 .... (2595 10 )

Banking History .... interest rates (The Economist, 1997, p. S7). There is also a clear link between banking crises and severe economic downturns, as demonstrated by the history of .... (2596 10 )

Interest Rates for Small Businesses Interest Rates for Small Businesses. .... to the community, a small business can expect an interest rate of .... the business in question does not have a history with the .... (779 3 )

Federal Reserve & US Economy .... argue that it is indefensible for the Fed to raise interest rates by the .... of the credit for engineering the longest economic expansion in US history "The vice .... (1162 5 )


Category: Economics - H
 
 
 
Common Topics
 
 
 
 
 
 
 
Click Here to Get Instant Access to over 32,000 Professionally Written Papers!!!
 
 
 
Join Now  
 
 
 
 
 
Saved Papers  
 
 
Save your essays here so you can locate them quickly!
 
 
 
Testimonials  
 
"Thank you for making such a high quality site! Your papers are the best I have seen around"
Debbie B.
 
"Your site was very helpful and gave me the details I needed in order to complete my essay!!!"
Mike F.
 
"This site is an excellent vehicle for quick referrences. Thanks a bunch!"
Carla T.
 
"Great site, I got a lot of new ideas I would have never thought of before."
Nate A.
 
"I love this site!!!"
Marie H.
 
 
 
 
Copyright © 2007 - 2014 Lots of Essays. All Rights Reserved. DMCA