The price of money

posted by
November 27, 2011
by David Friedman  
Posted in Commentary

"The price of money is what you have to give up to get it -- the inverse of the price level. If the price of an apple is fifty cents, the price of a dollar is two apples. The interest rate is the rent on money, measured in money. A change in the price of money affects both the money you are renting and the money you are paying as rent, leaving the ratio of the two unchanged." (11/25/11)  


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