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Intertemporal Choice, Saving and Investment, and Interest Rate: Contributions from a Neglected Hayekian Model

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  • Renaud Fillieule

Abstract

Hayek’s ‘Utility analysis and interest’ expounds a graphical model of intertemporal choice that has not received the attention it deserves. This model is important in that it can be used as a basic macroeconomic model and can therefore perform for the Austrian School the role that the Solow model plays for the standard neo-classical paradigm. This article provides an in-depth presentation of the Hayekian model, and then applies the model to key theoretical issues in macroeconomics; namely, the effects upon intertemporal equilibrium and upon the interest rate of a change in time preference, of the implementation of a technical development and of an increase in the supply of labor.

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  • Renaud Fillieule, 2017. "Intertemporal Choice, Saving and Investment, and Interest Rate: Contributions from a Neglected Hayekian Model," Review of Political Economy, Taylor & Francis Journals, vol. 29(2), pages 307-328, April.
    • Handle: RePEc:taf:revpoe:v:29:y:2017:i:2:p:307-328
    DOI: 10.1080/09538259.2017.1316565
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
    3. Hayek, F. A. & Caldwell, Bruce, 2007. "The Pure Theory of Capital," University of Chicago Press Economics Books, University of Chicago Press, number 9780226320991 edited by White, Lawrence H., September.
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    Cited by:

    1. Renaud Fillieule, 2022. "A critique of Friedrich Hayek’s argumentation in favor of a productivity theory of interest," Post-Print hal-04117743, HAL.

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