Bob goes solo in his continuation of his series on Capital & Interest Theory. In this episode he explains Bohm-Bawerk’s solution to the problem of interest, namely that present goods are more valuable than future goods. Bob also explains Bohm-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 Bohm-Bawerk’s theory coming from Keynes, Fisher, Frank Fetter, and Mises.
Mentioned in the Episode and Other Links of Interest:
- Part 1 in this series (BMS ep. 26).
- Paul Samuelson’s (with identity disclosed) referee reports on Bob’s journal articles on capital & interest theory.
- Bob’s doctoral dissertation, in which the final Appendix reconciles Bohm-Bawerk’s verbal critique with the standard result that r=MPK.
- Use Bob’s special link to subscribe to Liberty Classroom, where (among other courses) you can get Bob’s two courses on the History of Economic Thought.
- Help support the Bob Murphy Show.
The audio production for this episode was provided by Podsworth Media.