Interest rate = what businessmen call profit.
So here’s the super crude explanation. A higher population leads to an increased demand for final goods and services, which increases prices (relative or absolute terms) in the lower phases of production. This increases the interest rate (an increased demand for final goods and services means a reduced savings rate) and investment flows towards the lower phases, since they have higher profit margins (their prices have risen relative to the higher phases of production). The higher phases may see increased revenue, but their profit margins shrink as the interest rate is elevated. The structure of production becomes shorter and wider, that is, entrepreneurs adjust their investments until the normalized rate of profit (interest rate) is equal at every phase of production (of course, not this simple in real life). There’s vertical integration (two firms becoming one).
Again, think of Hayek’s triangle: money flows from bottom up, and production flows from top down.
A higher time preference = a shorter structure of production, and can also cause recessions and unemployment (if there’s rigidity).
Merlin, I’m still thinking over your response by the way,