Investment and real interest rates | Macroeconomics | Khan Academy

Intuition as to why high real interest rates lead to low investment and why low rates lead to high investment

Macroeconomics on Khan Academy: Topics covered in a traditional college level introductory macroeconomics course

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[JetskiDex]

how can one man, have all this knowledge.. lool and instead of yeezy taught me, Khann Taught me

[leetcheet]

If you could have replaced "project E" with "sub-prime borrowers" it may just bring to light whos fault the property bubble actually was...AKA Greenspan

Very important video for understanding the implications of easy money policies. Your videos are great, keep them coming!

[OriginalDisplayName]

I'm just here for exams mate.
I'd rather have a beer and a joint and lie in the park enjoying life and not trying to understand it.
Ignorance is bliss.

[leetcheet]

It's a small minority of people who actually take an interest in learning. The vast majority are ignorant and happy...

[jonatan]

As I understand it, this video seeks to convey the intuition that real interest rates are inversely related to planned investments. The explanation, however, seems to rest on the premise that the expected return of investment is independent from the real interest rate (2:30-2:45). But isn't the real interest rate in reality highly dependent on the return that you can expect on an investment? why would there be a high interest rate if not because the people lending out money could otherwise invest it with high returns?
I feel like I have reached a blind alley in understanding this intuition ... My intuition would tell me that if interest rates are high, that means that expected returns on investments are high, which would mean that people would invest more of their money.
I hope that my confusion makes sense, and that maybe somebody could enlighten me :)

[Krishnakrishna-vlse]

I can't believe it can be this good

[joyceamponsah]

Wow, you made so simple to understand. Thanks 👍

[MaximaPax]

Which interest rates (in EU) should I look to predict investment? Thank you!

[ariah]

Thank you!!! You're a good person!

[huynhtanthanhhuynh]

Some segments in the video are stamped not adjacent to each other

[BenoitJulien-zrkr]

Why do you map I in y-axis and r on x-axis, I know it is relative but why not stick to r on y-axis?

[itsezekielcallender]

first?
but thats to good for khanacademy

[vineetkumar]

#YouCanLearnAnything except Economics

[BenoitJulien-zrkr]

But again this is all Keynesian stuff if you belive in in the fact that prices are sticky! Are they?
We should not teach this anymore.