Debt has been a ubiquitous form of finance for millennia, and one might reasonably assume that we have a good handle on exactly what it is by now. It turns out that may not be the case.
A loan is commonly understood as the lender’s transfer of funds to the borrower on condition that the funds be repaid, with interest due in the interim. That is, the transaction is framed as a swap of loan proceeds on one hand for promises to pay interest and the amount borrowed back on the other. Call this the “standard view.” Under it, the … Read more