The Interest Rate Bears a Close Relationship to the Subsistence Fund

So in the Theory of Money and Credit, it is the subsistence fund, the fund of saved-up consumers’ goods that determines the length of the period of production.

Entrepreneurs, when they evaluate the profitability of the different investments and decide about the production processes they want to implement, do not, of course, orientate themselves by the size of the national subsistence fund. They have probably never heard of such a thing, and even if they had, they surely could not determine its size. Instead, they are guided by the interest rate. Yet, in the Theory of Money and Credit, the interest rate bears a close relationship to the subsistence fund. It provides the entrepreneurs with the information as to how lengthy the production processes can reasonably become, that is, it informs them about the size of the subsistence fund. Th is can be seen especially in Mises’s exposition of the ABCT [Austrian Business Cycle Theory].

--Eduard Braun, "The Subsistence Fund in Ludwig von Mises's Explanation of the Business Cycle," in Theory of Money and Fiduciary Media: Essays in Celebration of the Centennial, ed. Jörg Guido Hülsmann (Auburn, AL: Ludwig von Mises Institute, 2012), 197.