The powerful are pleased we find interest rates boring


Interest rates are inherently boring. But, they are very very important in the modern economy. Today’s needull explains interest rate in the best way possible. The writer not only looks at interest rates in standard ways like its effect on GDP growth etc., he also tries to look at rates philosophically. A very interesting read.

Now I’m going to get a tad metaphysical. Interest rates define the relationship between the present and the future. If interest rates are high, then we “discount” the future more heavily. That is to say, if interest rates are high, money next year is worth much less than money today. Conversely, when rates are low, money in a year’ s time is almost as valuable as money is right now. When rates are high, we live for the moment. When they are low, the future matters more.

The complete article

Tom Streithorst — Evonomics

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