gibson's paradox
Word Rarity
Rare
Frequency: Zipf frequency 2.68 in modern English
27
Scrabble Score
14
Letters
4
Syllables
11
Unique Chars
Meaning
name
The observation that the rate of interest and the general level of prices are positively correlated.
Example Sentences
- "For some years past Mr. A. H. Gibson has published a series of articles, mostly in the Bankers' Magazine, emphasising the extraordinarily close correlation over a period of more than a hundred years between the rate of interest, as measured by the yield of Consols, and the level of prices, as measured by the Wholesale Index-Number. […] [T]he extraordinary thing is that the "Gibson Paradox"—as we may fairly call it—is one of the most completely established empirical facts within the whole field of quantitative economics, though theoretical economists have mostly ignored it."
Etymology
Coined by the British economist John Maynard Keynes (1883–1946) in A Treatise on Money (1930; see the quotation), after the British economist Arthur Herbert Gibson, who noted the correlation in a series of articles for Bankers’ Magazine, particularly in its January 1923 and November 1926 issues (though it had previously been noted by the English economist Thomas Tooke (1774–1858)).