Primary Economic and Financial Professional Counseling: Western Scholars' Different Views on the Nature of Interests

Western scholars have different views on the nature of interest: (see page 38 of the textbook for details)

1 interest return theory. Theoretically, interest is a return, William? Patty believes that interest is a reward for temporarily giving up the right to use money.

2 Capital productivity theory. Theoretically, the essence of interest is the product of capital's own productivity. Say believes that the interest of loan capital consists of two parts, one is risk interest and the other is pure interest.

3 abstinence waiting theory. According to the theory, interest is the reward for capital owners to sacrifice their current enjoyment and satisfaction, give up their desire to consume and control their consumption.

4 interest time difference theory. Also known as time preference theory, this theory holds that the generation of interest and the level of interest rate depend on the difference of people's subjective evaluation of the same quantity of goods at present and in the future.

5 elastic preference theory. Also known as liquidity preference theory, the theory holds that interest is the reward for people to give up the flexibility of currency turnover in a specific period. (Keynes)