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The Scholastic Analysis of ZIRP: Justice, Usury, and the Zero Interest Rate Policy

Joseph A. Burke

Abstract


We evaluate the Zero Interest Rate Policy in light of the Scholastic teaching on usury. According to Scholastic analysis, interest rates are too low. While an unjustly high interest rate is an injustice against borrowers, an unjustly low interest rate is an injustice against lenders. The Zero Interest Rate Policy currently pursued by the Federal Reserve Bank is the opposite of usurious, in which interest rates do not sufficiently compensate lenders for the cost of inflation and the risk of default.

Joseph A. Burke, "The Scholastic Analysis of ZIRP: Justice, Usury, and the Zero Interest Rate Policy," Journal of Markets and Morality 17, no.1 (Spring 2014): 105-124.

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