Economics Magazine

LK on the Hill/Horwitz Debate

Posted on the 05 June 2013 by Lachmannian @TheLachmannian

Austrians might claim that a lower interest rate – or a lower price of credit – will induce greater investment when interest rates fall, but this does not necessarily follow in a world where business faces uncertainty, where expectations are subjective, and where demand for investment credit can collapse or be stagnant.  - Lord Keynes

Lord Keynes talks about the Greg Hill/ Steve Horwitz debate and specifically about the coordination of saving and investment and the loanable funds theory. As some may note, I consider this debate important because I think it would benefit Austrian theory if it took out loanable funds theory out of its overall framework.

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