Investors reckon we're all but certain to see the Federal Reserve raise U.S. interest rates at the central bank's meeting later this month. What better way to prepare for the first U.S. interest rate hike in almost a decade than to tour 6,000 years of interest rate history, seeking patterns that could give us clues about current financial markets and the wider world.
This week we speak with Richard Sylla, co-author with the late Sidney Homer on the fourth edition of A History of U.S. Interest Rates and professor of economics and financial institutions and markets at NYU Stern. We start in Babylonia, when Hammurabi codified the relations of debtors and creditors, and end at the zero bound of monetary policy in the twenty-first century. We learn about a Roman city that pledged its public colonnades as collateral for loans, why medieval French princes have terrible credit records, and how negative interest rates in parts of Europe really are an historic oddity.
In other words, Odd Lots read a 700-page book on interest rates so you don't have to. (No really you should read it, it's a great book).