Comparison and Coordination of Theories of Interest: a New Theory for Structural Adjustments in India
Keywords:
Monetary Policy, Theories of Interest, FLS Curve, MPf curveAbstract
The integration of the world's financial markets is increasing the pressure of external factors in the determination of domestic monetary policies and interest rates. Though the approaches of Major central banks towards the conduct of monetary policy differ in detail, there is broad agreement on fundamentals:
a) Pursuit of price stability
b) Stability of financial markets.
For this reason, real long-term interest rates are likely to converge on an international norm, the level of which will be determined by a complex interaction of both monetary and real factors, (New theory) and in particular by the pace of technological advance.
References
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[5] The general theory of Employment Interest and Money by J. M. Keynes
[6] Ackley, Gardner (1978) "The ‘IS–LM’ Form of the Model". Macroeconomics: Theory and Policy. New York: Macmillan. pp. 358–383. ISBN 0-02-300290-5.
[7] Interest rate: its structure, theories, policies and decisions by Abhay Bedekar P.56
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