The Pure Time-Preference Theory of Interest

It’s about time. Really! An entire book fleshing out the pure time-preference theory of interest has finally been assembled. The present crop of Keynesians play with interest rates believing they can create prosperity without a sound theoretical basis for how the market determines rates. It is the Austrian insight that present goods have a higher value than future goods, while the followers of Lord Keynes foolishly try to abolish human action.

Giants of the Austrian world have been assembled for the task, along with a fresh new introduction by Jeffrey Herbener. Rothbard, Mises, Garrison, Kirzner and Fetter systematically provide the underpinnings of a theory that, as Israel Kirzner writes, “for almost a century a particular theory of interest has been again and again discussed, refuted, defended, ignored, forgotten, and rediscovered; somehow it has managed to survive.”

Find out why!

From Douglas French’s foreword:

The following essays parse through the uniquely Austrian insight of the pure time-preference theory of interest, but more importantly go to the core of why modern central bank monetary engineering leaves the economy further from recovery while at the same time providing a Petri dish for speculation and malinvestment.