In this episode, we deep dive into the concept of interest rates, defining them as the proportion of a sum charged for its use by a lender to a borrower. We explore the critical distinction between "nominal" rates and "real" rates, which adjust for inflation to reveal the true cost of borrowing.

Listen in as we break down:

• The Role of Central Banks: How institutions like the Federal Reserve use interest rate targets as a primary tool to influence investment, unemployment, and inflation.
• Historical Extremes: A look at historical volatility, from US rates hitting 19% in the 20th century to Zimbabwe’s 800% hyperinflation attempt.
• Unconventional Policy: The theory and practice behind Zero Interest-Rate Policy (ZIRP) and the controversial "negative" rates used by econo ...