The theory of Austrian economics provides further insight i…

The theory of Austrian economics provides further insight into the difference between long term and short term people. In Austrian economics, long or short term thinking is understood in terms of time preference, which has to do with how willing people are to deprive themselves in the present in order to have a better future. In Austrian economics, the lower the time preference (in other words, the more willing people are able to defer gratification in the present) the larger the limit of the eventual growth in the economy is. People with a low time preference are more willing to deprive themselves to build bigger and more efficient machines today so that they can have a greater production tomorrow. Thus, their economy grows for longer and reaches a more advanced state in terms of the productivity of labor, than an economy of people with high time preference people.