Everyone believes that they know what an interest rate is. This study, however, examines some of the theoretical and practical complexities: the differences between interest, rent and profit; between nominal and real rates; between long and short rates; and how these interact. It looks, in particular, at how changes in short-term rates feed through into financial markets; and how the level of long-term rates influences the real economy. Finally, it examines the development of rates in the u0080 area since the beginning of 1999, and the conduct of monetary policy by the European Central Bank.
VIII, 52 p.
X, 52 p.