(ECONOMICS) the difference between the nominal interest rate and the rate of inflation; the actual premium charged by banks for lendable funds.
The real interest rate can be determined by subtracting the annualized rate of inflation from the prime rate offered by banks to borrowers with the best credit.
During the 1970's, the USA experienced relatively high inflation (peaking at 17% in January 1980). In some months this exceeded the prime rate, resulting in negative interest rates for short periods (e.g., April-October, 1978; Feb-July, 1979).
One problem of deflation (i.e., falling absolute prices) is that it always occurs when the economy is in VERY severe recession, and there is no way the central bank can reduce the real interest rate to zero, since 0% nominal rates minus negative inflation = positive real interest rates.
The real interest rate can be determined by subtracting the annualized rate of inflation from the prime rate offered by banks to borrowers with the best credit.
During the 1970's, the USA experienced relatively high inflation (peaking at 17% in January 1980). In some months this exceeded the prime rate, resulting in negative interest rates for short periods (e.g., April-October, 1978; Feb-July, 1979).
One problem of deflation (i.e., falling absolute prices) is that it always occurs when the economy is in VERY severe recession, and there is no way the central bank can reduce the real interest rate to zero, since 0% nominal rates minus negative inflation = positive real interest rates.
During the period 1978 to 1980, there were 14 (out of a total of 36) months during which the real interest rate was negative.
by Abu Yahya September 6, 2010
Get the real interest rate mug.MOne of Modest Mouse's Albums. Which has a greater meaning, but you have to think about it and actually listen to the song " Interstae 8" It says, " I drove around for miles, I drove around for days, I drove around for months and never even got no place" also thinkk of the actual number 8, it is the sign for infinite only right side up, so basically Interstae 8 is a never ending Interstate.
by red_ink_is_blood_in_a_pen September 23, 2005
Get the Interstate 8 mug.Related Words
intrest
• intrestant
• intresting
• intrestment
• Intrestmesting
• intrestontae
• interesting
• Interstellar
• Interstate
• interest
Get the no interest mug.by jwb71 July 24, 2011
Get the Intestine Tapper mug.Imagine a lopsided circle in side of your torso that would be a potato. Imagine a long string of content that no one wants that is every Netflix original ever. Now imagine a long case of flesh compacted into your abdomen this is your intestines, you are given your intestines at birth when your mother regurgitates them into your mouth.
Fun fact! If you grabbed someone’s intestines and stretched them out till they started to rip you would be insane!
Fun fact! If you grabbed someone’s intestines and stretched them out till they started to rip you would be insane!
Person 1: what should we do?
Person 2: well since he ate all of her ass the only option is to remove it from is intestines.
Person 1: GASP!
Person 2: well since he ate all of her ass the only option is to remove it from is intestines.
Person 1: GASP!
by Interface5 March 14, 2018
Get the Intestines mug.by bees! March 16, 2020
Get the I will fill your intestines with bees mug.if you use this sentence the speaker then knows you don't give a shit about his or her speech and that you want to die
by budgetsheep February 18, 2019
Get the that's very interesting tell me more mug.