Origins: Interesting Developments

It’s hard enough for economists to explain whether interest rates will go up or down in today’s world. How can we possibly hope to understand how the practice of charging interest began in the first place? When did people begin issuing interest-bearing loans? And how did they decide how much to charge for the privilege of borrowing money? The answer to these questions turns out to be quite simple, once one understands how ancient Sumer, Babylonia, Greece and Rome set their interest rates. Indeed, simplicity of calculation was what these ancient economies strove for above all else. Unlike today, […]