The Price of Money
A Guide to the Past, Present, and Future of the Natural Rate of Interest
Published on 8. August 2025
Book
Hardback
216 pages
978-0-19-780090-4 (ISBN)
Description
An accessible guide to the natural rate of interest, why it is likely going up, and what that means for the future of the global economy and markets.
Ask most people who sets interest rates, and they'll say it's the central bank. At a fundamental level, though, decisions by the Federal Reserve, European Central Bank, and their peers around the world are constrained by the natural rate of interest. The natural rate - the interest rate that balances supply of saving and demand for investment, whilst keeping inflation low and employment high - has moved from academic obscurity to a central role in monetary policy, and the operation of the economy and financial markets.
For almost half a century from the 1970s to the 2010s, the natural rate in the US and other advanced economies fell. In the last decade, it has started to rise. In the years ahead, the cost of borrowing has further to climb. That shift from falling to rising borrowing costs reflects seismic shifts in demographics, technology, and geopolitics. In the years ahead, risk factors from war to artificial intelligence and climate change could accelerate its rise. For everyone from Ministers of Finance balancing the books to Wall Street titans making the next big bet, the shift from falling to rising borrowing costs has profound consequences. In a world where money is more expensive, the cost of managing it poorly gets higher.
In The Price of Money, the Bloomberg Economics team explain the evolution of the natural rate, the forces driving it, where it is headed, and what that means for everything from government debt to saving for retirement.
Ask most people who sets interest rates, and they'll say it's the central bank. At a fundamental level, though, decisions by the Federal Reserve, European Central Bank, and their peers around the world are constrained by the natural rate of interest. The natural rate - the interest rate that balances supply of saving and demand for investment, whilst keeping inflation low and employment high - has moved from academic obscurity to a central role in monetary policy, and the operation of the economy and financial markets.
For almost half a century from the 1970s to the 2010s, the natural rate in the US and other advanced economies fell. In the last decade, it has started to rise. In the years ahead, the cost of borrowing has further to climb. That shift from falling to rising borrowing costs reflects seismic shifts in demographics, technology, and geopolitics. In the years ahead, risk factors from war to artificial intelligence and climate change could accelerate its rise. For everyone from Ministers of Finance balancing the books to Wall Street titans making the next big bet, the shift from falling to rising borrowing costs has profound consequences. In a world where money is more expensive, the cost of managing it poorly gets higher.
In The Price of Money, the Bloomberg Economics team explain the evolution of the natural rate, the forces driving it, where it is headed, and what that means for everything from government debt to saving for retirement.
Reviews / Votes
The authors of this short and thought-provoking book explain how economists weigh up the complex forces that determine global savings and investment and ultimately, the real interest rate. Look out for the effects of debt, heat, robots, and war that they forecast will push up the 'price of money'. * Wendy Carlin, Professor of Economics, University College London * There is no more important price than the long-term rate of interest. It has been falling for almost half a century, easing the burden of debt. The Price of Money explains why and predicts a reversal with profound effects for our finances, our societies, and our futures on the planet. You do not have to agree with every assumption in this comprehensive account, but you need to think about the consequences. * Chris Giles, Economics Commentator, Financial Times * Incisive examination of why the natural rate of interest matters, its main drivers, and where it's headed-required reading for anyone who is a serious investor. * Bill Dudley, Bloomberg Opinion columnist, former President of the Federal Reserve Bank of New York * The natural rate of interest is hugely important as a North Star for the economy but frustratingly impossible to observe. This clear and concise book sheds light on it with a mixture of history, modeling, and analysis. The authors make a compelling case that the natural rate is headed higher, creating new challenges for investors, governments, and companies. Reading this will help to prepare them. * Simon Rabinovitch, US Economics Editor, The Economist *More details
Language
English
Place of publication
New York
United States
Target group
Professional and scholarly
Illustrations
70 figures and 6 tables
Dimensions
Height: 14 mm
Width: 156 mm
Thickness: 235 mm
Weight
415 gr
ISBN-13
978-0-19-780090-4 (9780197800904)
Copyright in bibliographic data is held by Nielsen Book Services Limited or its licensors: all rights reserved.
Schweitzer Classification
Other editions
Additional editions
Jamie Rush | Tom Orlik | Stephanie Flanders
The Price of Money
A Guide to the Past, Present, and Future of the Natural Rate of Interest
Book
10/2025
Oxford University Press Inc
€25.00
Available immediately
Jamie Rush | Tom Orlik | Stephanie Flanders
The Price of Money
A Guide to the Past, Present, and Future of the Natural Rate of Interest
E-Book
07/2025
OUP eBook
€21.99
Available for download
Jamie Rush | Tom Orlik | Stephanie Flanders
The Price of Money
A Guide to the Past, Present, and Future of the Natural Rate of Interest
E-Book
07/2025
OUP eBook
€21.99
Available for download
Persons
Jamie Rush is Chief European Economist for Bloomberg Economics, based in London. He has previously worked at the British Treasury, the New Zealand Treasury, and the UK Office for Budget Responsibility. He holds a PhD in economics from the University of Sheffield.
Tom Orlik is Chief Economist for Bloomberg Economics, based in Washington DC. Previously, Orlik was the Chief Asia economist for Bloomberg and China economics correspondent for The Wall Street Journal, based in Beijing. Prior to a decade in China, he worked at the British Treasury, European Commission, and International Monetary Fund. He is the author of Understanding China's Economic Indicators and China: The Bubble that Never Pops.
Stephanie Flanders is global head of Economics and Government at Bloomberg News and Research, based in London. She was previously Chief Market Strategist for Europe at JP Morgan Asset Management and Economics Editor at the BBC. She has also served as Senior Advisor to US Treasury
Secretary Lawrence H. Summers, and worked at the New York Times, Financial Times, Institute for Fiscal Studies, and London Business School. She is an Honorary Fellow of Balliol College, Oxford and a Fellow of the Society of Professional Economists.
Tom Orlik is Chief Economist for Bloomberg Economics, based in Washington DC. Previously, Orlik was the Chief Asia economist for Bloomberg and China economics correspondent for The Wall Street Journal, based in Beijing. Prior to a decade in China, he worked at the British Treasury, European Commission, and International Monetary Fund. He is the author of Understanding China's Economic Indicators and China: The Bubble that Never Pops.
Stephanie Flanders is global head of Economics and Government at Bloomberg News and Research, based in London. She was previously Chief Market Strategist for Europe at JP Morgan Asset Management and Economics Editor at the BBC. She has also served as Senior Advisor to US Treasury
Secretary Lawrence H. Summers, and worked at the New York Times, Financial Times, Institute for Fiscal Studies, and London Business School. She is an Honorary Fellow of Balliol College, Oxford and a Fellow of the Society of Professional Economists.
Content
1: Jamie Rush;Tom Orlik;Stephanie Flanders: The Price of Money is Going Up
2: Jamie Rush;Tom Orlik: From Wicksell to Bernanke: A Brief History of the Natural Rate of Interest
3: Jamie Rush;Martin Ademmer: A New Model of the Natural Rate of Interest
4: Ana Andrade: Hard Times, Happy Days, and Electric Sheep: How Slowing Productivity Growth Dragged Down the Natural Rate of Interest, and the Fourth Industrial Revolution May Push It Up Again
5: Stuart Paul;David Wilcox: Demographic Destiny: How Baby Boom Savers Drove the Fall of the Natural Rate and Will Drive the Rise
6: Maeva Cousin;Jamie Rush: No More Free Lunch: Rising Debt Will Push Borrowing Costs Higher
7: Maeva Cousin;Jamie Rush: Temperature Rising: How Global Heating Will Drag the Natural Rate of Interest Down, and Investment in Net Zero Will Push It Up
8: Maeva Cousin;Dan Hanson;Eleonora Mavroeidi;Tom Orlik;Jamie Rush;Bhargavi Sakthivel;Jennifer Welch: The Return of History: How A Second Cold War Could Drive the Natural Rate Higher
9: Chang Shu;David Qu;Eric Zhu;Tom Orlik: China Shock: How China's Saving Impacts US Borrowing Costs
10: Ziad Daoud: The Problem with Petrodollars: How Cristiano Ronaldo, an Artificial Moon, and Flying Taxis in the Desert May Push US Interest Rates Higher
11: Alex Isakov: Russia's Revenge: How Sanctioned States Dodge the Weaponized Dollar
12: Selva Bahar Baziki;Adriana Dupita: The Rich Get Richer, the Rates Get Lower: How Rising Inequality Pushed the Natural Rate Lower and Artificial Intelligence Could Extend the Trend
13: Jamie Rush: The Era of Falling Rates Is Over
14: Jamie Rush;Dan Hanson;Maeva Cousin: Monetary Policy in an Age of Scarcity
15: Stephanie Flanders: A More Expensive World: What Does It All Mean?
2: Jamie Rush;Tom Orlik: From Wicksell to Bernanke: A Brief History of the Natural Rate of Interest
3: Jamie Rush;Martin Ademmer: A New Model of the Natural Rate of Interest
4: Ana Andrade: Hard Times, Happy Days, and Electric Sheep: How Slowing Productivity Growth Dragged Down the Natural Rate of Interest, and the Fourth Industrial Revolution May Push It Up Again
5: Stuart Paul;David Wilcox: Demographic Destiny: How Baby Boom Savers Drove the Fall of the Natural Rate and Will Drive the Rise
6: Maeva Cousin;Jamie Rush: No More Free Lunch: Rising Debt Will Push Borrowing Costs Higher
7: Maeva Cousin;Jamie Rush: Temperature Rising: How Global Heating Will Drag the Natural Rate of Interest Down, and Investment in Net Zero Will Push It Up
8: Maeva Cousin;Dan Hanson;Eleonora Mavroeidi;Tom Orlik;Jamie Rush;Bhargavi Sakthivel;Jennifer Welch: The Return of History: How A Second Cold War Could Drive the Natural Rate Higher
9: Chang Shu;David Qu;Eric Zhu;Tom Orlik: China Shock: How China's Saving Impacts US Borrowing Costs
10: Ziad Daoud: The Problem with Petrodollars: How Cristiano Ronaldo, an Artificial Moon, and Flying Taxis in the Desert May Push US Interest Rates Higher
11: Alex Isakov: Russia's Revenge: How Sanctioned States Dodge the Weaponized Dollar
12: Selva Bahar Baziki;Adriana Dupita: The Rich Get Richer, the Rates Get Lower: How Rising Inequality Pushed the Natural Rate Lower and Artificial Intelligence Could Extend the Trend
13: Jamie Rush: The Era of Falling Rates Is Over
14: Jamie Rush;Dan Hanson;Maeva Cousin: Monetary Policy in an Age of Scarcity
15: Stephanie Flanders: A More Expensive World: What Does It All Mean?