# Real interest rate reproach

- Canonical URL: https://www.gerhardmerk.de/real-interest-rate-reproach
- Post ID: 594020
- Modified: 2023-07-25T21:13:59+00:00
- Language: en

## Definition

The assertion that in the euro area, given the same nominal interest rate and a below-average inflation rate in one member country - such as Germany - the real interest rate for that member is above average and therefore inhibits growth. - This disadvantage is offset, however, by the fact that - the lower inflation rate results in an improvement in price competitiveness vis-à-vis the other participating countries and - thus gives rise to a real growth effect (probably overcompensating for the increase in the real interest rate). - See devaluation, fiscal, inflation differentials, growth, exchange rate effect, real. - Cf. Monthly Report of the Deutsche Bundesbank of December 2008, pp. 38 f. (Change in price competitiveness within the EMU states since 1999). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 2.0.0