Re: Growth, Interest and Wage Inequality - To the austrian economists here
Money return is interest.
Can you elaborate on this a bit? In my understanding, interest is a return on productive business, and money can only return interest if invested in a productive business. It can't return interest just by itself, and banks/owners of money won't loan it to anyone unless they expect that someone to be productive, and thus provide the "money interest" through their own work.
All entrepreneurs and businessmen decide, how much capital they need and what price they are willig to pay (maximum their expected returns of investment). When there is a lot of growth in the economy - probably due to a new sector emerging - there is a lot of demand for money in the market. The price (interest) is given by supply and demand. Imagine Google offering 20% interest if you give them your money, this would convince a lot of people to supply their beloved money for some time. So some really profitable entrepreneur is always given money if he can "outbid your timepreference".
The other side of the equation is the risk involved, with some companies being more risky, and some investors being more averse to risk, but in a large economy, the $ per extra "unit" of risk tends to trend to a preset equilibrium, too, so, overall, every company's interest rate is basically based on the amount of risk they have. i.e. what you're saying is true, and works in an efficient economy, but there is A LOT of noise there (Google may offer 20% and be very low risk, but if I think it's too good to be true without doing my research, I still won't invest).
Though if you just want to simplify the model with the assumption that efficient markets will correctly price interest, you can ignore all this
One could disagree and point out to the moneysupply as the second determinant, but I somehow assume the supply curve to be fix and supply is determined by demand, because I dont have an idea yet, how supply would be varied exogenously in a theoretical freemarket framework. (Maybe this assumes a natural savings rate curve) This might be a problem if inventions and growth opportunities also affect saving behavior. but this argument might be circular.
Only example I can think of with this is, again, the risk factor. People may hoard more, reducing the supply, if they think the economy is at risk and they'll need more money soon, or they may spend and invest more if they fear that their money may be at risk, and is best invested elsewhere.