Quick Note #1

Interest, the practice of charging money for time, is founded, according to Boehm-Bawerk, on the qualitative difference between present and future. It rests on the fact that present goods are more highly valued than those which become available in the future. (TGE, 174) That is, one is in general willing to pay more for something which is available now then for the same product which will only be available at some future date. There is then, in short, a difference in value between present and future commodities. “Interest is simply the price expression of this difference” (TGE, 175)

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