Interest Rates

Paper Summary:

The paper discusses what interest rates are, who controls interest rates, how interest rates affect an economy, the conundrum of why 30-year interest rates have not increased in spite of all contrary experience, and a conclusion concerning whether interest rates should be increased at a measured or quick pace.

From the Paper:

"I wonder if when Nostradamus was predicting the end of the world and saw the world awash in flames, what he really saw was the world awash in debt. Presently, because interest rates in the United States are so low, Americans and American businesses have taken out loans at an increased rate to keep pace with their high demand of goods and services. The Bush administration's tax cuts have added fuel to this spending trend also. The purpose for these two actions was to jump start the United States economy; Policies that have been successful. The real GDP has continued to grow at a good pace and the fourth quarter of 2004 growth of 3.1 percent annual rate is an indication of this growth . But what are the consequences of this growth come?"

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• Analytical Essay # 8993 : "The Effects of Low Interest Rates on Housing Markets"
• Essay # 32583 : "Interest Rates and the Federal Reserves"

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