Interest Is Not The Marginal Product Of Capital

By Robert P. Murphy of The Mises Institute

Austrian Economics • Nov 23, 2025 at 8:57 PM EST

In actual markets the interest rate emerges from time, prices, and capital valuation—not raw productivity.

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Bob revisits capital and interest theory to show why the textbook result “interest = MPK” only holds in a one-good world, and why in actual markets the interest rate emerges from time, prices, and capital valuation—not raw productivity.

Video Length: 00:57:24

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