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As Brian mentions in his comments this is because in standard models when people make intertemporal decisions they take inflation into the account. Take the following example: You have a rational utility maximizing person who makes decision between consuming $\\\$100$ today or saving it for later consumption. For simplicity lets assume discount factor is ...


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The issue is that they did not had much other choice as the war and war reparations made German hyperinflation virtually inevitable. As given by quantity theory of money a price level, change in which gives you inflation, is given by: $$P = \frac{MV}{Y}$$ so the change in price level $P$ depends not just on quantity of money $M$, but also velocity $V$ and ...


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The first statement refers to the return on investment to the owners of the shares. After they are paid the 1 B dollar dividend what happens to the company afterwards is not going to change that fact. Of course they would prefer that the company continue to do well. If they sell the shares immediately after receiving the dividend then they don't care. ...


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Main users of overnight lending are banks. Banks have large in- and out-flows from customers on a daily basis. They typically borrow to meet a temporary outflow. There is a term premium for borrowing at longer terms. By implication, borrowing overnight is theoretically the cheapest financing cost. Financial entities will borrow overnight to finance ...


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