1
Assistant professor of economics, payam noor university, yasuj, iran
2
Assistant professor of economics, university of yasuj
Abstract
We explain the micro and macroeconomic effects of the compound and simple discounting in banking loans in an economic structure. At first we show that according to the quantity equation of money with the money interest rate, the inflation rises with the compound discounting more than simple discounting. Then we show that according to this fact that the real rate of return couldn't increases exponentially in a compound rate, consequently the rate of debt grows faster than the real rate of return and leads the economy to the inherent disequilibrium. Also, we show that the compound discounting leads to the concentration of wealth and consequently this worsens the income distribution, and the unequal distribution distorts the economic growth.
Askari, S. E., & Hoseiny, S. A. (2017). Comparative Analysis of the Economic Effects of the Compound and Simple Discounting. Economic Strategy, 6(21), 119-134.
MLA
Seyyed Ehsan Askari; Seyyed Aqil Hoseiny. "Comparative Analysis of the Economic Effects of the Compound and Simple Discounting". Economic Strategy, 6, 21, 2017, 119-134.
HARVARD
Askari, S. E., Hoseiny, S. A. (2017). 'Comparative Analysis of the Economic Effects of the Compound and Simple Discounting', Economic Strategy, 6(21), pp. 119-134.
VANCOUVER
Askari, S. E., Hoseiny, S. A. Comparative Analysis of the Economic Effects of the Compound and Simple Discounting. Economic Strategy, 2017; 6(21): 119-134.
)