High interest rates lead to bankruptcies and unemployment, study finds.
Perceptions about money affect how monetary policy is made, which in turn impacts the economy. High interest rates can lead to more bankruptcies and unemployment. If people lose trust in the money being used, it can stop working as a medium of exchange or store of value. In a money-based economy, prices show how much things are worth in relation to each other. Ignoring this can cause big problems for society. The way economics is studied should change to match how things really work in the world to avoid serious consequences.