Re: Re: P.S.

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

it is safer holding a government bond than putting money in the bank, so
people pay a premium for the bonds.  I don't know why they don't keep the
cash instead.

On Fri, May 10, 2002 at 08:32:53PM -0700, Sabri Oncu wrote:
> Gill writes:
>
> > I should have said that mainstream theory
> > suggests another possible explanation for
> > positive interest rates that, like explanations
> > based on time or risk preferences, is consistent
> > with the operation of competitive and complete
> > markets.
>
> Here is a question:
>
> What is the theoretical justification of negative (real) interest
> rates we recently have observed in Japan?
>
> Sabri
>

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx