Hansen and Jeff Deist cover the “pure” rate of interest, expressed via time preference, and why the temporal nature of production helps us understand the premium for present goods relative to future goods. Far from exploiting workers or borrowers, capitalists actually advance money today in exchange for a more risky and uncertain return tomorrow—in the process making us all wealthier based on our individual subjective preferences. At every stage of production, interest helps producers get the capital they need now to bring us, the consumer, all the goods and services we enjoy. This show explains why we can’t understand the productive economy without understanding interest rates.”
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