Inflation, the level of investment, and interest rates

Yakir Plessner; Haim Shalit

doi:10.1016/S0014-2921(86)80012-5

Inflation, the level of investment, and interest rates

Research output: Contribution to journal › Article › peer-review

Abstract

Using a microeconomic model, the paper examines the impact of inflation on the level of investment. In the framework of the loanable-funds market, the behavior of a typical risk averse borrower and a risk averse lender is investigated. It is shown how inflation depresses the level of activity in the loanable-funds market and under what conditions the Fisherian rule for the relation between inflation and the interest rale holds.

Original language	English
Pages (from-to)	1169-1187
Number of pages	19
Journal	European Economic Review
Volume	30
Issue number	6
DOIs	https://doi.org/10.1016/S0014-2921(86)80012-5
State	Published - 1 Jan 1986
Externally published	Yes

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/S0014-2921(86)80012-5

Cite this

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AB - Using a microeconomic model, the paper examines the impact of inflation on the level of investment. In the framework of the loanable-funds market, the behavior of a typical risk averse borrower and a risk averse lender is investigated. It is shown how inflation depresses the level of activity in the loanable-funds market and under what conditions the Fisherian rule for the relation between inflation and the interest rale holds.

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Inflation, the level of investment, and interest rates

Abstract

ASJC Scopus subject areas

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