IDEAS home Printed from https://ideas.repec.org/a/kap/iaecre/v6y2000i1p84-9410.1007-bf02295753.html
   My bibliography  Save this article

The analytical preconditions for Keynes' theory of money

Author

Listed:
  • L. Johnson
  • Thomas Cate

Abstract

Evaluating Keynes' belief that the "general theory" would create a revolution in economics, depends, in part, on what defines the key elements of the general theory. This paper presents the analytical preconditions for one of these key elements, his liquidity preference theory of money. It is argued here that Keynes's liquidity preference theory of money was both a result of his own intellectual development and a theoretical necessity, given the rest of the theoretical structure of the general theory. Specifically, this paper argues that there were two analytical preconditions for the theory of money contained in the general theory. The first was Keynes' rejection of the quantity theory of money as the basis for conducting monetary policy, a theory he inherited from his English predecessors and he himself had embraced and to which he contributed earlier in his professional career. The second was his rejection of the neoclassical loanable funds theory of interest rate determination. Copyright International Atlantic Economic Society 2000

Suggested Citation

  • L. Johnson & Thomas Cate, 2000. "The analytical preconditions for Keynes' theory of money," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(1), pages 84-94, February.
    • Handle: RePEc:kap:iaecre:v:6:y:2000:i:1:p:84-94:10.1007/bf02295753
    DOI: 10.1007/BF02295753
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02295753
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02295753?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thomas M. Humphrey, 1984. "Algebraic quantity equations before Fisher and Pigou," Economic Review, Federal Reserve Bank of Richmond, vol. 70(Sep), pages 13-22.
    2. Bradley W. Bateman, 1990. "Keynes, Induction, and Econometrics," History of Political Economy, Duke University Press, vol. 22(2), pages 359-379, Summer.
    3. Bernard W. Dempsey, 1935. "The Historical Emergence of Quantity Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 50(1), pages 174-184.
    4. Wicksell, Knut, 1907. "The Influence of the Rate of Interest on Prices," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 17, pages 213-220.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. L. Johnson & Robert Ley & Thomas Cate, 2001. "Keynes' theory of money and his attack on the classical model," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(4), pages 409-418, November.
    2. L. Johnson & Robert Ley & Thomas Cate, 2004. "The concept of equilibrium: A key theoretical element in Keynes' revolution," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 32(3), pages 222-232, September.
    3. L. Johnson & Thomas Cate, 2002. "The general theory: Fabrication or revolution? David Laidler, 1999, pp. 377," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(1), pages 87-96, March.
    4. L. Johnson & Thomas Cate, 2006. "A History of Post Keynesian Economics Since 1936: A Review Article," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(1), pages 115-123, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:hal:wpspec:info:hdl:2441/2961 is not listed on IDEAS
    2. Jérôme Creel & Henri Sterdyniak, 1999. "La politique monétaire sans monnaie," Revue de l'OFCE, Programme National Persée, vol. 70(1), pages 111-153.
    3. Oeffner, Marc, 2008. "Agent–Based Keynesian Macroeconomics - An Evolutionary Model Embedded in an Agent–Based Computer Simulation," MPRA Paper 18199, University Library of Munich, Germany, revised Oct 2009.
    4. van Eeghen, Piet-Hein, 2021. "Funding money-creating banks: Cash funding, balance sheet funding and the moral hazard of currency elasticity," International Review of Financial Analysis, Elsevier, vol. 76(C).
    5. Hanin, Frédéric, 2003. "La place du Treatise on Money dans l’oeuvre de Keynes : une théorie de l’instabilité," L'Actualité Economique, Société Canadienne de Science Economique, vol. 79(1), pages 71-86, Mars-Juin.
    6. Luis Eduardo Arango & Fernando Arias & Luz Adriana Flórez, 2008. "Trends, Fluctuations, and Determinants of Commodity Prices," Borradores de Economia 521, Banco de la Republica de Colombia.
    7. Michał Brzoza-Brzezina, 2002. "Estimating the Natural Rate of Interest: A SVAR Approach," NBP Working Papers 27, Narodowy Bank Polski.
    8. Mésonnier, J-S. & Renne, J-P., 2004. "A Time-Varying Natural Rate for the Euro Area," Working papers 115, Banque de France.
    9. Barbaroux, Nicolas, 2008. "The Wicksellian Flavour in Macroeconomics," Perfil de Coyuntura Económica, Universidad de Antioquia, CIE, August.
    10. Donaldson, Jason Roderick & Piacentino, Giorgia & Thakor, Anjan, 2018. "Warehouse banking," Journal of Financial Economics, Elsevier, vol. 129(2), pages 250-267.
    11. John B. Taylor, 2017. "Rules Versus Discretion: Assessing the Debate Over the Conduct of Monetary Policy," NBER Working Papers 24149, National Bureau of Economic Research, Inc.
    12. Alexander Mihailov, 2006. "Operational independence, inflation targeting, and UK monetary policy," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 28(3), pages 395-421.
    13. Ciccone, Michele, 2022. "Some notes on Ricardo's analysis of the convergence process of the market rate of interest to the natural rate," MPRA Paper 112887, University Library of Munich, Germany.
    14. Ivan Verbanov, 2003. "Forerunner of the Theories of the Free Market Economy," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 72-88.
    15. repec:hal:wpspec:info:hdl:2441/5122 is not listed on IDEAS
    16. Yossi Yakhin, 2008. "Financial Integration And Cyclicality Of Monetary Policy In Small Open Economies," Working Papers 0811, Ben-Gurion University of the Negev, Department of Economics.
    17. Anari, Ali & Kolari, James, 2019. "The Fisher puzzle, real rate anomaly, and Wicksell effect," Journal of Empirical Finance, Elsevier, vol. 52(C), pages 128-148.
    18. Jérôme Creel & Henri Sterdyniak, 2001. "La théorie budgétaire du niveau des prix, un bilan critique," Revue d'économie politique, Dalloz, vol. 111(6), pages 909-939.
    19. Probst, Julius, 2019. "Global real interest rate dynamics from the late 19th century to today," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 522-547.
    20. Shinji MIURA, 2016. "Unified Money Circulation Equation and an Analogical Explanation for Its Solvability," Journal of Economics Bibliography, KSP Journals, vol. 3(1), pages 28-37, March.
    21. Domeij, David & Ellingsen, Tore, 2015. "Rational Bubbles and Economic Crises: A Quantitative Analysis," SSE Working Paper Series in Economics 2015:1, Stockholm School of Economics.
    22. repec:spo:wpecon:info:hdl:2441/2961 is not listed on IDEAS
    23. Michael Woodford, 1998. "Doing Without Money: Controlling Inflation in a Post-Monetary World," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 173-219, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:iaecre:v:6:y:2000:i:1:p:84-94:10.1007/bf02295753. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.