The Evolution of Interest & Its Role in Today’s Economy

Featured Events | Jun 21, 2023 | Gabelli School of Business

Lending money with interest fees has been a topic of debate for centuries. Even the Greek philosopher Aristotle deemed the practice immoral. However, lenders continued charging interest on the premise that it was a reward for parting with their money.

Edward Chancellor, a columnist for Reuters’ Breakingviews, and contributor to the Wall Street Journal, Financial Times, and MoneyWeek, explored the essential role of interest in determining how money is distributed and priced in his book The Price of Time: The Real Story of Interest. In this webinar co-sponsored by the Gabelli Center for Global Security Analysis, Museum of American Finance, and CFA Society New York, Chancellor overviewed the value of interest rates and how they’ve affected housing, insurance, and more from medieval Europe to today.

Throughout the COVID-19 pandemic, interest rates were lowered to boost the economy, which harmed the real estate market, cryptocurrency, and regional banking. Chancellor said it could also have an impact on other sectors as well.

“It wouldn’t surprise me if problems emerge in areas where we are not expecting problems,” he said. “A year ago, I said ‘we have to get through this interest rate cycle because I don’t know what’s happening.’ Now that they’re getting back to what I would call more ‘normal,’ maybe we can think about the latest cycle coming to an end.”