Interest Rates and Inflation

TL;DR

This paper presents a two-component economic model linking interest rates and inflation, showing results that align closely with classical theories like Wicksell's, suggesting a fundamental relationship in economic dynamics.

Contribution

Introduces a novel two-component model connecting interest rates and inflation, providing insights consistent with classical economic theories.

Findings

Model aligns with Wicksell's theory

Preliminary results show a strong correlation

Suggests a fundamental economic relationship

Abstract

A relation between interest rates and inflation is presented using a two component economic model and a simple general principle. Preliminary results indicate a remarkable similarity to classical economic theories, in particular that of Wicksell.