The Natural Rate of Interest Is a Theoretical Construct and It Can Be Thought of As the Direct “Price of Time”; Banks Exist to Trade Time

Since Wicksell, the natural rate of interest has been understood to be the rate that directly reflects actors’ underlying time preferences, i.e., the degree to which they discount the future. The natural rate is a theoretical construct and unobservable in the market. It can be thought of as the direct “price of time.” Because we cannot exchange time directly, financial intermediaries such as banks have evolved to trade time in the form of money. The supply and demand for loanable funds correspond, respectively, to a desire to part with time by pushing consumption to the future and a desire to acquire time by pushing consumption into the present.

--Steven Horwitz, "Monetary Disequilibrium Theory and Austrian Macroeconomics: Further Thoughts on a Synthesis," in Money and Markets: Essays in Honor of Leland B. Yeager, ed. Roger Koppl, Foundations of the Market Economy (London: Routledge, 2006), 174-175.