Interest and hidden traps in the interest rate calculation methods

Investigating the Relationship between the Facility Interest Rate and the Bank Deposit Interest Rate in Iran

The facility interest rate is one of the most important macroeconomic variables. The bank facility interest rate is associated with other macro-economic variables, one of which is the bank deposit interest rate. Using the time series data of the 1973-2017 period and the simultaneous equation system, the researchers estimated four equations using the three-stage least squares method.The result o...

Study of the Relationship between Inflation Rate and Bank Interest Rate in the Iranian Economy

Experts believe that by lowering the interest rate on bank accounts, total cost of goods and services decreases, and secondly, investment production increases,  both of which lead to lower inflation and provide stable employment field, on the other hand, are concerned about the negative effects of lowering the interest rate without lowering inflation and know the underlying requirement of nomin...

Pricing electricity risk by interest rate methods

We address a method for pricing electricity contracts based on valuation of ability to produce power, which is considered as the true underlying for electricity derivatives. This approach shows that an evaluation of free production capacity provides a framework where a change–of–numeraire transformation converts electricity forward market into the common settings of money market modeling. Using...

Survival of the Interest Rate Based Debt Financing System

Evidence has been mounting (over the centuries) that the interest based debt financing regime is under ever increasing distress. All of the earlier crises whatever label they carried− exchange rate crisis or banking crisis – have been debt crises in essence. At the present, empirical research suggests that the debt-to-GDP ratio of the richest members of the G-20 threatens to touch 120% m...

Making Interest-free Banking System More Efficient with Regards to Interest Rate