Böhm-Bawerk, Jevons and the 'Austrian' theory of capital: 'a quite different relation'

Abstract

The paper examines the relationship between the interest theories of Jevons and Böhm-Bawerk. Although their results can easily be reconciled mathematically, Böhm-Bawerk's ‘misunderstanding’ of the Jevonian formula reveals a fundamental difference concerning their derivation. Despite their formal similarity, the two models exhibit a different conceptual architecture and thus also attach quite different meanings to the concept of the interest rate. Rather than trying to reconcile them, the paper suggests to analyse their relationship as part of an entire transformation, which can be equally traced between the value and price theories of the two authors.

Keywords:

• Jevons Bohm-BAWERK Austrian Theory Of Capital Capital And Interest Theories Marginalism Nineteenth-CENTURY Economic Thought