Abstract
Recently Fields-Hart publish two articles on interest rate determination in this journal. In both articles, they analyze interest rates on the basis of an unconventional definition of the supply of loanable funds. In this note we argue that their concept of the supply of loanable funds based on “spillover from the money market” is a gross misunderstanding of the concept. Although Fields-Hart considered their concept as “critically important part of their story,” the results in their first article are independent of this mistake. However, their second article continues this misconception and hence yields invalid results.
Recommended Citation
(2026)
"The Supply of Loanable Funds: A Comment on the Misconception and Its Implications,"
Journal of Economics and Finance Education: Vol. 7:
Iss.
2, Article 8.
Available at:
https://scholarship.rollins.edu/jefe/vol7/iss2/8
