Abstinence theory of interest

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The abstinence theory of interest asserts that the money used for lending purposes is the money not used for consumption – which means, earning interest by abstaining from spending makes the funds possible and available for borrowers.[1]

The originator of the theory is Nassau William Senior.


  1. ^ EconomyProfessor.com Archived January 31, 2010, at the Wayback Machine, Retrieved 2008-05-29