---
entity_slug: rate_of_interest
entity_type: Element
vsm_system: S2
type_rationale: The rate of interest is a persistent economic artifact that exists
  as a measurable price in the market, rather than being an activity, relationship,
  or abstract principle.
vsm_rationale: As a price signal that coordinates the allocation of lendable capital
  between suppliers and demanders, the rate of interest functions as a key coordination
  mechanism that prevents oscillations in capital markets.
classified_at: '2026-02-23T11:24:29.191656'
---

# Classification: Rate Of Interest

## Entity Type

Element

## VSM System

S2

## Type Rationale

The rate of interest is a persistent economic artifact that exists as a measurable price in the market, rather than being an activity, relationship, or abstract principle.

## VSM Rationale

As a price signal that coordinates the allocation of lendable capital between suppliers and demanders, the rate of interest functions as a key coordination mechanism that prevents oscillations in capital markets.
