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The Impact Of Interest Rates On Economic Growth: An Austrian Perspective

 For many years, the relationship between interest rates and economic growth has been a major focus of economic theory and policy discussions.

According to Austrian theory, interest rates are an important signal in a market economy that balances the time preferences of borrowers and savers, not only a tool that central banks can manage in an effort to maintain economic stability.

Interest rates naturally arise from the interaction of individual time preferences, according to Austrian economics.

This natural coordination is distorted, -according to the Austrian School, which includes Friedrich Hayek and Ludwig von Mises, -by central banks setting artificially low interest rates.

These artificially low interest rates fuel the boom phase of the business cycle, which is marked by fast economic expansion and speculative investments.

According to Austrian theory, letting the free market set interest rates is the key to long-term economic progress.

The Austrian viewpoint emphasizes the significance of letting market forces set interest rates and emphasizes the risks associated with central bank intervention. 

https://mises.org/mises-wire/impact-interest-rates-economic-growth-austrian-perspective

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