The Maximum Interest Rate on an Unbalanced Growth Path

Abstract In a steady-state economy, an interest rate that is larger than the maximum growth rate would lead to an inconsistent price system. We identify a similar condition for a multisectoral economy off the steady state: If persistent inflation is to be avoided, the interest rate must not be larger than the maximum growth rate of a feasible subtechnology that is capable of covering final demand.

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Year of publication:	2000-12
Authors:	Diedrich, Martin
Institutions:	Centre for Economic Research, School of Economics and Management Studies
Subject:	Multisectoral Growth Theory \| Capital Theory \| Input-Output

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Extent:	application/pdf
Series:	Keele Department of Economics Discussion Papers (1995-2001). - ISSN 1352-8955.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Keele University, Department of Economics Discussion Papers Number 2000/16 24 pages
Classification:	D57 - Input-Output Analysis ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005181749