Interest Rate Normalization in a World with High Indebtedness

Sigga Benediktsdottir1, Soha Ahmed2

  • 1Jackson School of Global Affairs, Yale University, New Haven, CT 06511 USA.

Atlantic Economic Journal : AEJ
|May 17, 2023
PubMed

Related Concept Videos

Geometric Mean01:15

Geometric Mean

The mean is a measure of the central tendency of a data set. In some data sets, the data is inherently multiplicative, and the arithmetic mean is not useful. For example, the human population multiplies with time, and so does the credit amount of financial investment, as the interest compounds over successive time intervals.
In cases of multiplicative data, the geometric mean is used for statistical analysis. First, the product of all the elements is taken. Then, if there are n elements in the...
3.4K
Normal Stress01:19

Normal Stress

Normal stress is a type of stress that occurs when forces act perpendicular, or normal, to a material's cross-sectional area. This stress often arises in structures when subjected to axial loading, which is the application of force along the axis of an object. A practical example of this can be found in bridge truss members.
When a rod is under axial loading, the internal forces and corresponding stress are normal to the plane of the section, so it is termed normal stress. It's...
629
Regression Toward the Mean01:52

Regression Toward the Mean

Regression toward the mean (“RTM”) is a phenomenon in which extremely high or low values—for example, and individual’s blood pressure at a particular moment—appear closer to a group’s average upon remeasuring. Although this statistical peculiarity is the result of random error and chance, it has been problematic across various medical, scientific, financial and psychological applications. In particular, RTM, if not taken into account, can interfere when...
6.3K
The Integrated Rate Law: The Dependence of Concentration on Time02:39

The Integrated Rate Law: The Dependence of Concentration on Time

While the differential rate law relates the rate and concentrations of reactants, a second form of rate law called the integrated rate law relates concentrations of reactants and time. Integrated rate laws can be used to determine the amount of reactant or product present after a period of time or to estimate the time required for a reaction to proceed to a certain extent. For example, an integrated rate law helps determine the length of time a radioactive material must be stored for its...
35.5K
The Anchoring-and-Adjustment Heuristic01:25

The Anchoring-and-Adjustment Heuristic

In order to make good decisions, we use our knowledge and our reasoning. Often, this knowledge and reasoning is sound and solid. However, sometimes, we are swayed by biases or by others manipulating a situation. For example, let’s say you and three friends wanted to rent a house and had a combined target budget of $1,600. The realtor shows you only very run-down houses for $1,600 and then shows you a very nice house for $2,000. Might you ask each person to pay more in rent to get the...
7.3K
Generalized Hooke's Law01:22

Generalized Hooke's Law

The generalized Hooke's Law is a broadened version of Hooke's Law, which extends to all types of stress and in every direction. Consider an isotropic material shaped into a cube subjected to multiaxial loading. In this scenario, normal stresses are exerted along the three coordinate axes. As a result of these stresses, the cubic shape deforms into a rectangular parallelepiped. Despite this deformation, the new shape maintains equal sides, and there is a normal strain in the direction of the...
1.1K