Böhm-Bawerk meets Keynes: What does determine the interest rate, and can the latter become negative?

Arbeitspapier

100 years after Böhm-Bawerks death and nearly 70 years after Keynes has died there is still fundamental controversy about the factors which determine the interest rate in the long run. While Economists in the Austrian tradition see it as solely driven by real phenomena, Keynesian authors mainly stress the monetary factors. Likewise, the current phase of low interest rates is explained in most different ways by prominent economists. While many blame the expansive monetary policy, others point to excess capital supply in ageing industrial states. The present paper seeks to combine these explanations by the use of a stock-flow-consistent macro-model. It is argued that theories in the tradition of Böhm-Bawerk and Keynes respectively do not at all preclude each other but, on the contrary, can nicely be combined.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CAWM Discussion Paper ; No. 65

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: General ; Money and Interest Rates: General ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General
• Subject: public debt ; stock flow consistent model ; monetary policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): van Suntum, Ulrich
• Event: Veröffentlichung
• (who): Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
• (where): Münster
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/93106
• Last update: 10.03.2025, 11:42 AM CET