ESCP Europe

The book Economy and Interest by Maurice Allais presents a comprehensive and rigorous theory of interest, examining it through its economic, monetary, and social dimensions. Allais explores the mechanisms behind interest rate formation, the relationship between capital, savings, production, and money, as well as the conditions for achieving economic equilibrium and efficiency. Using fables, theoretical models, and concrete examples, he distinguishes between real and monetary interest, while analyzing their impact on social productivity and efficiency. The book critiques existing theories and argues for the necessity of a consistently positive interest rate. Finally, it proposes deep reforms to economic institutions to better regulate capital dynamics and interest rates.