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- Title
A COMPARISON OF INVESTMENT AND CASH BUILDING OF SAVINGS: A REJOINDER.
- Authors
PĂTRUțI, ALEXANDRU
- Abstract
Although Austrian literature does not usually dwell on this particular aspect, there are differences between the direct investment of savings and adding to one's personal cash balance (hoarding). Following Bagus's (2016) critic of my original article, the present paper will introduce supplementary qualifications. I will argue that in the course of ordinary business activity, there is no (plausible) reason why hoarding should imply disinvestment. Furthermore, I claim that the market rate of interest is the main indicator for entrepreneurs in a developed society which uses an advanced credit system. Finally, the paper will summarize the differences between investment and cash building and put these differences in connection to economic growth in order to see whether any of the two methods offers additional benefits.
- Subjects
SAVINGS; INTEREST rates; PRODUCTION (Economic theory); ECONOMIC development; DISINVESTMENT; BUSINESSPEOPLE
- Publication
Quarterly Journal of Austrian Economics, 2017, Vol 20, Issue 4, p373
- ISSN
1098-3708
- Publication type
Article