Planet Money Does Piece on Crowding Out Effect
A month or so ago I wrote this post on the impact of government borrowing on interest rates. Basically, as the government borrows more and more money they “crowd out” private sector borrowers or force them to pay higher interest rates. Last Tuesday NPR’s Planet Money Team did this podcast in which they visit Jamaica and talk with a tire repairman who is unable to obtain capital to expand his business and a billionaire Michael Lee-Chin who owns a bank which lends most of its money to the Jamaican Government. If you wanted to learn more about this concept it’s worth the time.
Posted: July 6th, 2010 under Economics & Interest Rates.
Tags: crowding out effect, how government borrowing can impact mortgage rates, michael lee-chin