When the future value of money for a credit is discounted with the present value of money, the interest rate is calculated, and it depends on both the productivity of the companies and the likelihood of its realisation in the economy. All of these are reflected in the expected value of money and form a budget.
Historical Backdrop
• IRVING FISHER The Nature of Capital and Income: adaptive expectations.
• JOHN MUTH Rational Expectations and the Theory of Price Movements: rational expectations hypothesis.
• MOHAMMAD PESARAN The Limits of Rational Expectations: expectations.
