Time Preference and Capital Formation: An Austrian-School Analysis of Savings and Growth in Advanced and Eastern European Economies

This scientific research paper examines how time preference - the value individuals place onpresent consumption versus future gains - shapes saving behaviour, investment, and long-termgrowth. Rooted in Austrian School theory and informed by Keynesian insights, the study finds thatlow time preference fosters high savings, lower real interest rates, and strong capital formation.High time preference, by contrast, undermines saving, raises borrowing costs, and slowsconvergence. Case studies of Germany, China, and Poland highlight how cultures of patience fuelsustainable growth, while Romania and Bulgaria reveal the economic fragility that stems fromshort-termism.The findings affirm that time preference is not merely cultural but a core structural driver ofeconomic development. In today’s volatile global economy, nurturing patience may be the mostunderestimated growth strategy.