Post
Topic
Board Economics
Re: Growth, Interest and Wage Inequality - To the austrian economists here
by
jtimon
on 13/07/2011, 16:25:10 UTC
Very interesting topic.
It seems that growth leads to inequalities, but they're later reduced by competition and by workers moving to other sectors.
If certain skill (human capital) like programming becomes very valuable, people invest in that new capital with high returns (study it) until that capital has a similar return that other capitals. I would say that all capital returns satellite around the the one of main capital, which is money. Money return is interest.
Interest is the rock bottom of all capital returns: if a sector, the investments in that sector stops until (by deterioration of capital or an increase in demand of what that capital produces) it returns more than the money itself again.

The relationship between growth and interest is not trivial for me. Can you elaborate on this?
How is this related with the time preference theory?