BOHM-BAWERK, EUGEN VON

born Feb. 12, 1851, Brnn, Moravia, Austrian Empire [now Brno, Czech Republic] died Aug. 27, 1914, Kramsach, Tirol, Austria-Hungary [now in Austria] in full Eugen, Knight (Ritter) von Bhm von Bawerk Austrian economist and statesman. After graduating from the University of Vienna, Bhm-Bawerk worked in the Austrian Ministry of Finance (187275). He was allowed by the ministry to study at several German universities. In 1880 he moved to Innsbruck, becoming a full professor at the university there in 1884. In 1890 he returned to the Ministry of Finance and took part in the currency reform of 1892 and the adoption of the gold standard. He later held cabinet office several times, resigning in 1904 and subsequently returning to the University of Vienna. Bhm-Bawerk was, with Carl Menger and Friedrich von Wieser, one of the three pillars of the Austrian school of economists. Starting from Menger's work, Bhm-Bawerk developed a theory of the origin and determination of the rate of interest and the period of turnover of capital occurring with the attainment of the market clearing wage. This provided the capital theory of the Austrian school. Through its influence on later writers such as Knut Wicksell and Irving Fisher, it provided the basis for the modern treatment of interest, which is currently regarded as arising from the interaction of preference for present goods (which inhibits willingness to save and thus provide funds for investment) and the productivity of longer periods of turnover of capital (which causes investment funds to be demanded).