Question

Compare and contrast E. Bohm-Bawerk’s and J.B. Clark’s theories of interest.

Answer 1

Point of difference	E. Bohm-Bawerk	J.B. Clark
Name	E. Bohm-Bawerk’s theory of interest is called Time Preference theory.	J.B. Clark’s theory of interest is called Marginal Productivity Theory.
Meaning	It says that the interest rate is the benefit that present consumption has and future consumption does not.	It says that rates of interest are derived using marginal productivity of capital.
Content	Present consumption is more important than future. The reason behind this that Bohn Bawerk gave is that the life is uncertain and the future is unexpected. People prefer present because of the technicality of future. The interest that can be earned from today is on present goods only and if seen as an advantage, capital invested today will have benefits in future also.	Capital is the key factor determining producer’s profits. Higher interest rate can be earned only when there’s a higher productivity of capital and vice versa. Therefore, a producer in order to not make any losses, will invest capital only till the point when interest rate is equal to marginal productivity of capital.

You can also reframe it in paragraph form. I’ve given it to you in table form. It is okay both ways. I hope it helps.