Quote by Irving Fisher

The rate of interest acts as a link between income-value and capital-value


The rate of interest acts as a link between income-value and

Summary

This quote highlights the important role of interest rates in connecting income-value (the present value of future income) and capital-value (the present value of future cash flows generated by an asset). Interest rates determine the cost of borrowing and the return on investment, thus influencing the valuation of assets and the overall market value of capital. By setting the interest rate, central banks and monetary authorities can regulate the flow of capital, impact economic growth, and balance the relationship between income-value and capital-value.

By Irving Fisher
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