Who authored the treatise titled "The Theory of Interest as Determined by Impatience to Spend Income and Opportunity to Invest It"?

The correct answer is Irving Fisher.

Key Points

• Irving Fisher was an American economist best known for his contributions to the fields of economics and statistics.
• He authored the influential treatise "The Theory of Interest as Determined by Impatience to Spend Income and Opportunity to Invest It" in 1930.
• The work is a cornerstone in the study of intertemporal choice and the theory of interest rates.
• Fisher's theory integrates the concepts of time preference and investment opportunities to explain interest rates.

Additional Information

• Time Preference:
  • Refers to the preference of individuals to have goods and services sooner rather than later.
  • It is a fundamental concept in determining the rate of interest.
• Investment Opportunities:
  • Opportunities available to individuals or firms to invest money in productive ventures that yield future returns.
  • Fisher's theory posits that these opportunities are a key determinant of interest rates.
• Intertemporal Choice:
  • The decision-making process involved in choosing between consumption at different points in time.
  • Fisher's work is foundational in the analysis of how individuals allocate resources over time.
• Real Interest Rate:
  • The interest rate adjusted for inflation, reflecting the true cost of borrowing and the true yield on savings.
  • Fisher made significant contributions to understanding the relationship between nominal and real interest rates.