Saturday, June 18, 2016


Notes from Wikipedia

Interest differs from profit, in that interest is received by a lender, whereas profit is received by the owner of an asset, investment or enterprise. (Interest may be part or the whole of the profit on an investment, but the two concepts are distinct from one another from an accounting perspective.)

Interest differs from profit. Interest is to the financial sector what profit is to the productive sector.


In the late 19th century, Swedish economist Knut Wicksell in his 1898 Interest and Prices elaborated a comprehensive theory of economic crises based upon a distinction between natural and nominal interest rates. In the 1930s, Wicksell's approach was refined by Bertil Ohlin and Dennis Robertson and became known as the loanable funds theory.

Loanable Funds backstory.


The first attempt to control interest rates through manipulation of the money supply was made by the Banque de France in 1847.

Note the method by which interest rates are controlled.

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