For example, with a nominal interest rate of 8%, a one-year loan of $1,000 will cost $80. At the end of the year, the borrower pays back $1,080.

Real interest rates, derived by subtracting the rate of inflation from the central bank’s policy rate, are at historic lows – punishing savers while delivering a boost to fixed-rate borrowers ...

Example 13.1: Discount Points for Lower Interest Rates This example illustrates the comparison of two $100,000 loans. The major difference between the two loans is that the nominal interest rate in ...

For example, real economic growth will be difficult to achieve since nominal growth needs to be higher than the current inflation rate of 8.6 per cent. This comes to mind whenever I hear those touting ...

Raising the target rate, as Prof. Stanford suggests, does mitigate the nominal interest rate problem, but it still focuses on inflation rather than stagnation.

As Bank of Canada deputy governor Paul Beaudry explained on Thursday in a speech to the Victoria Chamber of Commerce, real interest rates have been plunging all over the world since the early 1990s.