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Lesson 6 of 25

Irving Fisher's Impatience Theory of Interest

Building on the general equilibrium setup solved in the last week, this lecture looks in depth at the relationships between productivity, patience, prices, allocations, and nominal and real interest rates. The solutions to three of Fisher's famous examples are given: What happens to interest rates when people become more or less patient? What happens when they expect to receive windfall riches sometime in the future? And, what happens when wealth in an economy is redistributed from the poor to the rich?

Source: Open Yale Courses

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Present Value Prices and the Real Rate of Interest

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Shakespeare's Merchant of Venice and Collateral, Present Value and the Vocabulary of Finance

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Financial Theory - Video Series

25 lessons

Lessons

1
Why Finance?
2
Utilities, Endowments, and Equilibrium
3
Computing Equilibrium
4
Efficiency, Assets, and Time
5
Present Value Prices and the Real Rate of Interest
6
Irving Fisher's Impatience Theory of Interest
7
Shakespeare's Merchant of Venice and Collateral, Present Value and the Vocabulary of Finance
8
How a Long-Lived Institution Figures an Annual Budget Yield
9
Yield Curve Arbitrage
10
Dynamic Present Value
11
Financial Implications of US Social Security System
12
Overlapping Generations Models of the Economy
13
Will the Stock Market Decline when the Baby Boomers Retire?
14
Quantifying Uncertainty and Risk
15
Uncertainty and the Rational Expectations Hypothesis
16
Backward Induction and Optimal Stopping Times
17
Callable Bonds and the Mortgage Prepayment Option
18
Modeling Mortgage Prepayments and Valuing Mortgages
19
Dynamic Hedging
20
Dynamic Hedging and Average Life
21
Risk Aversion and CAPM
22
The Mutual Fund Theorem and Covariance Pricing Theorems
23
Risk, Return, and Social Security
24
Leverage Cycle and the Subprime Mortgage Crisis
25
Shadow Banking: Parallel and Growing?
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