March, 2014

Rothbard's Time Market and the Demand for Present Goods

  • Patrick Newman

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This paper defends the Rothbardian theory which states that the proportion of consumption spending relative to investment spending is systematically related to the interest rate through time preference in society, contrary to Hülsmann (2008). After clarifying that a time market transaction is based on two exchanges over time, it illuminates the necessary implications when analyzing the demand for and supply of present goods. Building on this insight, it shows that rather than assuming that the demand for present goods is held constant throughout the analysis, the traditional change in time preference necessarily implies a reconfiguration. As a result, the Rothbardian theory still holds.

Find the full article at the Mises Institute.