8. Theory of Debt, Its Proper Role, Leverage Cycles

Financial Markets (2011) (ECON 252) Professor Shiller devotes the beginning of the lecture to exploring the theoretical determinants of the level of interest rates. Eugen von BoehmBawerk names technical progress, roundaboutness, and time preference as the crucial factors. Professor Shiller complements von BoehmBawerk s analysis with two of Irving Fisher s modeling approaches, the view of the interest rate as the equilibrium variable in the savings market and the perspective of simple Robinson Crusoe eco