Economic Time

Abstract

This paper argues that economists require a particular concept of time in order to facilitate the development of theory that has greater explanatory power in describing and analyzing the sort of economy in which we are primarily interested--the monetary economy usually termed capitalism. And while it is observed that a concept of time has been recognized as important by economists of various persuasions, it is argued that a very specific concept is required. We propose a concept of time to be used in analysis which is consistent with the perception and experience of time in a monetary or capitalist economy. This concept of time is determined by the debt cycle, and the length of this cycle is determined by the interest rate. Thus, while our proposed time-measure is certainly of an historical nature (months, years), it is not simply clock-time: the length of economic time is fluid and is regulated by the interest rate, a variable of significance in dictating a host of socially important effects.

JEL Classification: E43