The interest rate occupies a central place in economic theory, but its understanding varies from one school of thought to another. For neoclassicals, it represents the cost of reconciling savings and investment on the capital market. Keynesians see it as the opportunity cost of holding money rather than financial assets. The Austrian school of thought proposes a radically different vision, viewing the interest rate as the price of time itself, reflecting individuals' temporal preferences in their fundamental relationship between present and future.

The coordination of time preferences on the scale of complex economies is achieved through the interest rate. This mechanism is the only way to efficiently coordinate the three major flows that determine the price of capital: savings, investment and consumption. These flows fluctuate organically between those with a high time preference, who value present consumption more, and those with a low time preference, who are more inclined to save and invest.

The concept of original interest, developed by Ludwig von Mises, is defined as the ratio between the value attributed to the satisfaction of immediate needs and that attributed to more distant future periods. This difference in temporal value is expressed in the form of the interest rate, i.e. the additional price we are willing to pay to enjoy a good now rather than tomorrow. The original interest remains an individual, subjective and ever-changing relationship with time.

Hans-Hermann Hoppe explains that the market interest rate represents the aggregate sum of all levels of individual time preference, balancing social savings with social investment. On a societal scale, all time preferences are reflected in the natural market interest rate, which continually changes according to the subjective valuations of economic actors.

The interest rate also establishes the natural link between debtor and creditor. The debtor favors present consumption and accepts to pay the price in the form of interest, since consuming now means freeing himself from the previous stage of capital accumulation. The creditor is rewarded for postponing the use of his capital in order to improve his living conditions in the future.

Jesus Huerta de Soto points out that the interest rate plays a decisive role in coordinating the behavior of consumers, savers and producers. High savings mean low interest rates, and signal entrepreneurs to concentrate their efforts in the stages of production furthest from consumption. Conversely, low savings lead to higher interest rates, indicating that profits should be made in the stages closest to final consumption. Savings must always be understood as a promise of future consumption, which entrepreneurs try to fulfill.

The interest rate allows resources to be allocated not only in space, as ordinary prices do, but also in time, making it a true intertemporal coordination rate. In an economy with a sound currency, any manipulation of the price of capital would be impossible, because as soon as the interest rate is set artificially low, the shortage of savings is reflected in the reduction of available capital, naturally leading to a rise in rates that restores equilibrium.

Economic development depends not only on technical knowledge, but also on prior savings. The interest rate is the mechanism that coordinates these savings with investment needs. When this signal is respected, the economy can develop harmoniously, and the capital structure adapts to people's real time preferences. However, when this signal is distorted by the manipulation of interest rates by central banks, major distortions appear in the productive structure, paving the way for the business cycles that Austrian theory sets out to explain.