Capital and Interest in the Austrian Tradition, Part 2 of 3

Tags: Austrian Economics Overview, Capital and Interest Theory

04/19/2019 Robert P. Murphy

Bob continues his series on capital and interest theory. In this episode he explains Böhm-Bawerk’s solution to the problem of interest, namely that present goods are more valuable than future goods. Bob also explains Böhm-Bawerk’s three separate causes for the higher valuation of present over future goods, including the notorious third cause, which is the higher physical productivity of more roundabout processes. Finally, Bob addresses the criticism of Böhm-Bawerk’s theory coming from Keynes, Fisher, Frank Fetter, and Mises.

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