Recently I read the article by Bellante and Garrison named Philliips Curves and Hayekian Triangles (1988). The question I have is the following: “Clearing the market for loanable funds in the face of such a monetary injection requires that the rate of interest falls until the quantity of funds dema…

The more distantly in the future they are situated, the higher the returns they offer (based on the interest rate.) Durable consumer goods/capital goods are sensitive to interest rates in this manner.

The thing you have to remember (and this confused me a while too) is that the Hayekian Triangle and the Structure of Production can be interpreted in many ways. The most commonly understood way is the “smokestack” industries that Garrison references. However, you also have to interpret it (and Garri…

[image] A Question about Roger Garrison's "Time and Money" And the ABCT Economics Questions Currently I’m reading extensively Roger Garrison’s “Time and Money” in preparation for my upcoming Macroeconomics class (I’m sure all of you would agree its always best …

Thanks for your replies! “The more distantly in the future they are situated, the higher the returns they offer (based on the interest rate.) Durable consumer goods/capital goods are sensitive to interest rates in this manner.” Why are durable consumer goods/capital goods sensitive to the interest…

Because of +ve time preference. People prefer the same good now to the same good in the future (remember that: a good is homogeneous in its serviceability; if you want a good in the future because it is more useful then, we’re no longer talking about two homogeneous goods.) Capital goods and durabl…

The time discount effect is when the profitability of a good increases as the interest rate is lowered. For example, starting a retailing business might base some of its profitability off of a decrease in the interest rate, but moreso on consumer demand (derived demand). Constructing a skyscraper f…

The Hayekian Triangle - interest rate and implications for the intertemporal structure of production

Economics Economics Questions

nirgrahamUK March 17, 2010, 1:14pm 4

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The Hayekian Triangle - interest rate and implications for the intertemporal structure of production

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