Present Value Prices and the Real Rate of Interest - Financial Theory - John Geanakoplos - Lecture 5 of 26 - Video-lecture

Video-lecture, Financial Theory

Description: Philosophers and theologians have railed against interest for thousands of years. But that is because they didn't understand what causes interest. Irving Fisher built a model of financial equilibrium on top of general equilibrium (GE) by introducing time and assets into the GE model. He saw that trade between apples today and apples next year is completely analogous to trade between apples and oranges today.