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lunedì 29 agosto 2011

The Interest Rate

The Interest rate to be paid for the use of free capital provides the individual entrepreneur with an indication of the possibility of expanding production. The interest rate establishes itself as such a level that all production processes possible at this rate can find a supply of free capital and all production that can no longer afford the interest must remain undone because it would not be economic. Hence, as we have shown, it is guaranteed that a roundabout method of production will only be lengthned to such an extent that a timely freeing up of capital which is required for its maintenance occurs

Richard Von Strigl, "Capital & Production" pag. 97

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