Popular Interest Rate Theory Describes but Fails to Explain
16 March 2026

Popular Interest Rate Theory Describes but Fails to Explain

Audio Mises Wire

About

Milton Friedman and others tried to explain interest rates using liquidity, economic activity, and inflation expectations. These things, however, only describe interest but do not explain it. Only the Austrian theory of time preference correctly explains interest.

Original article: https://mises.org/mises-wire/popular-interest-rate-theory-describes-fails-explain