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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Mark Adams who wrote (128343)10/9/2001 2:19:03 PM
From: TRINDY  Read Replies (3) of 436258
 
Mark, to get the real interest rate one subtracts the rate of inflation from the nominal rate. Thus, if Japan is truly experiencing deflation, the real interest rate is negative. Under conditions of deflation that have taken place in the US in its past history, borrowers have actually had to take creditors to court to demand their right to repay. Just wanted to clear up the thinking of any readers that might think you mean the real interest rate is positive.

Cheers!
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