Neutral rate of interest

From Mises Wiki, the global repository of classical-liberal thought
Jump to: navigation, search

Neutral rate of interest is a uniform, originary rate of interest (see "Originary interest") in certain inconceivable imaginary constructions which assume neutral money. With a neutral rate of interest, the interest rate on loans would always coincide with the ratio between the prices of present goods and the prices of future goods, under the assumption that all prices change uniformly.[1]


  1. Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-07-17.