ECON 3430 Chapter Notes - Chapter 4: Canadian Northern Railway, Real Interest Rate, Philosophes

• School: York University
• Department: Economics
• Course: ECON 3430
• Professor: Brenda Spotton- Visano

Document Summary

Lenders have been despised for most of history. They make borrowers pay for loans, while just sitting around doing nothing. No wonder people have been vilified for charging interest. No wonder that for centuries, clerics pointed to biblical passages damning interest. Even philosophe(cid:396)s su(cid:272)h as a(cid:396)istotle (cid:449)eighed i(cid:374) agai(cid:374)st the p(cid:396)a(cid:272)ti(cid:272)e, (cid:272)alli(cid:374)g the (cid:862)(cid:271)(cid:396)eedi(cid:374)g of (cid:373)o(cid:374)e(cid:455) f(cid:396)o(cid:373) (cid:373)o(cid:374)e(cid:455)"" u(cid:374)(cid:374)atu(cid:396)al. Afte(cid:396) s(cid:272)o(cid:396)(cid:374)i(cid:374)g le(cid:374)de(cid:396)s fo(cid:396) (cid:373)ille(cid:374)(cid:374)ia, toda(cid:455) (cid:449)e (cid:396)e(cid:272)og(cid:374)ize thei(cid:396) se(cid:396)(cid:448)i(cid:272)e as a fundamental building block of civilization. Credit is one of the critical mechanisms we have for allocating resources. Without it, our market-based economy would grind to a halt. Even the simplest financial transaction, such as saving some of your paycheque each month to buy a car, would be difficult, if not impossible. And corporations, most of which survive from day to day by borrowing to finance their activities, would not be able to function.