The Interest Rate And Interest Rates

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Since people always prefer money right now to the present prospect of getting the same amount of money some time in the future, the present good always commands a premium in the market over the future. This premium is the interest rate, and its height will vary according to the degree to which people prefer the present to the future, i.e., the degree of their time-preferences. (Ebling, 1996, p.82)
In determining the originary interest rate, Mises thinks that the rate of originary interest directs the investment activities of the entrepreneurs. It determines the length of waiting time and of the period of production in every branch of industry. I do not completely agree in this view. Though it is true that the interest rate plays an
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It is therefore impossible to formulate any praxeological theorem concerning the relation of the amount of capital available in the whole nation or to individual people on the one hand and the amount of saving or capital consumption and the height of the originary rate of interest on the other hand. The allocation of scarce resources to want-satisfaction in various periods of the future is determined by value judgments and indirectly by all those factors which constitute the individuality of the acting man. (Mises, 1949, p. 24)
The interest rate has three related jobs. First, the interest rate equalizes savings and borrowing. Secondly, the interest rate equalizes net savings and investment. Thirdly, the interest rate allocates spending for consumption relative to investment. (Foldvary, 2015, web.)

In standard economics, the rate of interest is determined by the market for loanable funds, funds available for borrowing. The supply of loanable funds comes from savings and from money creation. Savings is defined as income minus spending for consumption. Time preference is a general tendency rather than a universal absolute; hence, some people with a strong concern for their future would save funds even at an interest rate of zero. With a higher rate of interest, more people are willing to save funds, so at some quantity of saved funds, the supply curve of savings rises with higher rates of real

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