Sentences with phrase «loanable funds»
"Loanable funds" refers to the money available for borrowing in a financial system. It includes the amount of money that individuals and businesses are willing to lend or invest, and also the amount that banks or financial institutions can lend out. The term helps people understand the overall pool of money that can be used for loans or investments. Full definition
But imagine a scenario where the demand for loanable funds leaves interest rates near zero, but the times are insecure and violent, leaving you uncertain that if you stored your cash privately, you would run too large of a risk of having it stolen.
alephblog.com
And neither is it a question of the lack of loanable funds.
Should the Fed taper its bond buying, rates will inevitably head higher as the supply of dollars chasing fixed - income investments will dwindle, forcing rates higher to lure more loanable funds.
Many economists believe that government spending «crowds out» private investment by forcing the private sector to compete for bonds in the mythical «loanable funds market».
If you think about it, we are literally choking on loanable funds.
Dirk Bezemer and Geoffrey Gardiner, «Quantitative Easing is Pushing on a String» (paper prepared for the Boeckler Conference, Berlin, October 29 - 30, 2010), make clear that «QE provides bank customers, not banks, with loanable funds.
When the free bank responds by lowering the market rate it charges to attract the marginal potential borrower on the demand for loanable funds curve, it is not inflating but maintaining the all - important Wicksellian coordination of the market and natural rates of interest.
This has a ripple effect on the demand for loanable funds everywhere, unless the market rate of interest is equally as high.
Banks are not intermediaries of loanable funds — and why this matters.
Should the Fed taper its bond buying, rates will inevitably head higher as the supply of dollars chasing fixed - income investments will dwindle, forcing rates higher to lure more loanable funds.
Interest rates are a function of the supply and demand for loanable funds.
There's also considerable slack in capital markets (lots of cheap, loanable funds), a global excess of savings over investment («sec stag»), investment deficits in public goods, and if anything, a deflationary bias in economies across the globe, including here and especially in Europe.
But now, perhaps, we'll be seeing the first sign of demand for loanable funds.
«Second, is to encourage higher private savings as a source of loanable funds to support domestic credit and capital market, and expand financial inclusion.