{"id":44938,"date":"2019-04-01T13:30:58","date_gmt":"2019-04-01T18:30:58","guid":{"rendered":"https:\/\/olduvai.ca\/?p=44938"},"modified":"2019-04-01T13:31:00","modified_gmt":"2019-04-01T18:31:00","slug":"being-and-time-and-central-banks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=44938","title":{"rendered":"Being and Time (And Central Banks)"},"content":{"rendered":"\n

BEING AND TIME (AND CENTRAL BANKS)<\/a><\/h3>\n\n\n\n

People value present goods more highly than future goods. For instance, an apple available today is considered more valuable than the same apple available in, say, one month. This is expressive of time preference<\/em> \u2014 which is an undeniable fact, a category of human action.<\/p>\n\n\n\n

The sentence \u201cHumans act\u201d is a logically irrefutable truth. It cannot be denied without causing a logical contradiction. By saying \u201cHumans can not<\/em> act\u201d, you act and thus contradict your very statement.<\/p>\n\n\n\n

From the true insight that humans act we can deduce that human action takes place in time<\/em>. There is no timeless human action. Were it otherwise, people\u2019s goals would be instantaneously reached, and action would be impossible \u2014 but we cannot think that we cannot<\/em> act.<\/p>\n\n\n\n

The market interest rate is expressive of time preference<\/em>, and as such, it is also a category of human action. If determined in an unhampered market, the (natural<\/em>) market interest rate denotes the discount<\/em> that future goods are subject to relative to present goods.<\/p>\n\n\n\n

If one US-dollar available in a year is trading at, say, 0.95 US-dollar, it means that the market interest rate is 5.0% (the calculation is: [0.95 \/ 1 \u2013 1]*100).<\/p>\n\n\n\n

Should people start valuing present goods more highly than future goods \u2014 which is expressive of a rise in time preference \u2014, the discount on future goods vis-\u00e0-vis present goods and thus the market interest rate go up.<\/p>\n\n\n\n

If peoples\u2019 time preference declines, the discount on future goods vis-\u00e0-vis present goods drops, and so does the market interest rate \u2014 meaning that people wish to save more and consume less out of their current income.<\/p>\n\n\n\n

The interest rate and central banking<\/strong><\/p>\n\n\n\n

In an unhampered market, the market interest rate reflects peoples\u2019 time preference. Nowadays, however, the market interest rate is no longer determined in an unhampered market. It is dictated by the central bank.<\/p>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

BEING AND TIME (AND CENTRAL BANKS) People value present goods more highly than future goods. For instance, an apple available today is considered more valuable than the same apple available in, say, one month. This is expressive of time preference \u2014 which is an undeniable fact, a category of human action. The sentence \u201cHumans act\u201d is a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,7380,431,534,25478,10333,839],"class_list":["post-44938","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-cobden-centre","tag-interest-rates","tag-monetary-policy","tag-thorsten-polliet","tag-time","tag-us-dollar"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/44938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44938"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/44938\/revisions"}],"predecessor-version":[{"id":44939,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/44938\/revisions\/44939"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}