Theory Of Interest Apr 2026

: The baseline compensation for the time value of money, often based on government securities.

: An extension of the classical view that includes bank credit and "dishoarding" (releasing idle cash) as part of the supply, treating interest as the price determined by the total supply and demand for loanable funds. Theory of Interest

: Argues that interest is not a reward for saving, but a reward for parting with liquidity . According to John Maynard Keynes , people prefer holding cash for its safety and flexibility; interest is the premium required to convince them to hold less-liquid assets like bonds. : The baseline compensation for the time value