Economics Dictionary of ArgumentsHome
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| Discounting: In economics, discounting is the process of determining the present value of future cash flows or payments by applying a discount rate. It reflects the time value of money, where money today is worth more than the same amount in the future. Discounting is crucial in investment analysis, decision-making, and valuing long-term projects or assets. Seee also Calculation._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Discounting - Dictionary of Arguments
Rothbard III 464 Discounting/marginal product/Rothbard: If the DMVP (Discounted marginal value product) schedules determine the prices of nonspecific factor services, what determines the shape and position of the DMVP schedules? >Marginal product/Rothbard, >Factor market/Rothbard, >Factors of production/Rothbard. In the first place, by definition it is clear that the DMVP schedule is the MVP (marginal value product) schedule for that factor discounted. (…) the MVP of the factor is discounted in accordance with the going pure rate of interest on the market. Rothbard III 466 Now suppose that the rate of interest in the economy rises, as a result, of course, of rises in time-preference schedules. This means that the rate of discount for every hypothetical MVP will be greater, and the absolute levels lower. One of the determinants of the DMVP schedule, then, is the rate of discount: (…) the rate of discount is determined by individual time preferences. The higher the rate of discount, the lower will tend to be the DMVP and, therefore, the lower the price of the factor; the lower the interest rate, the higher the DMVP and the price of the factor. >Interest/Rothbard._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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