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The Pure Time-Preference Theory of Interest

  • The Pure Time-Preference Theory of Interest by Jeffrey Herbener

Tags Capital and Interest Theory

12/16/2011Jeffrey M. Herbener

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.
Author:

Contact Jeffrey M. Herbener

Jeffrey Herbener teaches economics at Grove City College and is chairman of the economics department. He is assistant editor of the Quarterly Journal of Austrian Economics..

References

2011, Mises Institute

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