stylistic:tone
Austrian theories

Eugen Böhm von Bawerk and other members of the Austrian School also put forward notable theories of the interest rate.

The doyen of the Austrian school, Murray N. Rothbard, sees the emphasis on the loan market which makes up the general analysis on interest as a mistaken view to take. As he explains in his primary economic work, Man, Economy, and State, the market rate of interest is but a manifestation of the natural phenomenon of time preference, which is to prefer present goods to future goods. To Rothbard,

Too many writers consider the rate of interest as only the price of loans on the loan market. In reality...the rate of interest pervades all time markets, and the productive loan market is a strictly subsidiary time market of only derivative importance.

Interest is explainable by the rate of time preference among the people. To point to the loan market is insufficient at best. Rather, the rate of interest is what would be observed between the "stages of production", indeed a time market itself, where capital goods which are used to make consumers' goods are ordered out further in time away from the final consumers' goods stage of the economy where consumption takes place. It is this spread (between these various stages which will tend toward uniformity), with consumers' goods representing present goods and producers' goods representing future goods, that the real rate of interest is observed. Rothbard has said that

Interest rate is equal to the rate of price spread in the various stages.

Rothbard has furthermore criticized the Keynesian conception of interest, saying

One grave and fundamental Keynesian error is to persist in regarding the interest rate as a contract rate on loans, instead of the price spreads between stages of production.