Speculation, Liquidity Preference, and Monetary Circulation
The sharp exchanges that Keynes had with some of his critics on the loanable funds theory made it harder to appreciate the degree to which his thought was continuous with the tradition of monetary analysis that emanates from Wicksell, of which Keynes's A Treatise on Money was a part. In the aftermath of the General Theory (GT), many of Keynes's insights in the Treatise were lost or abandoned because they no longer fit easily in the truncated theoretical structure he adopted in his latter work. A part of Keynes's analysis in the Treatise which emphasized the importance of financial conditions and asset prices in determining firms' investment decisions was later revived by Minsky, but another part, about the way self-sustained biases in asset price expectations in financial markets exerted their influence over the business cycle, was mainly forgotten. This paper highlights Keynes's early insights on asset price speculation and its link to monetary circulation, at the risk perhaps, of downplaying the importance of the GT.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter Temin & Joachim Voth, 2004.
"Riding the South Sea bubble,"
Economics Working Papers
861, Department of Economics and Business, Universitat Pompeu Fabra.
- Peter Temin & Hans-Joachim Voth, 2004. "Riding the South See Bubble," Working Papers 213, Barcelona Graduate School of Economics.
- Temin, Peter & Voth, Hans-Joachim, 2004. "Riding the South Sea Bubble," CEPR Discussion Papers 4221, C.E.P.R. Discussion Papers.
- Peter Temin & Hans-Joachim Voth, 2003. "Riding the South Sea Bubble," Working Papers 91, Barcelona Graduate School of Economics.
- Korkut Erturk, 2003. "Asset Price Bubbles, Liquidity Preference and the Business Cycle," Working Paper Series, Department of Economics, University of Utah 2003_09, University of Utah, Department of Economics.
- Korkut A. Erturk, 2006. "Asset Price Bubbles, Liquidity Preference And The Business Cycle," Metroeconomica, Wiley Blackwell, vol. 57(2), pages 239-256, 05.
- Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-15, March.
- Andrei Shleifer ad Robert W. Vishny, 1995.
"The Limits of Arbitrage,"
Harvard Institute of Economic Research Working Papers
1725, Harvard - Institute of Economic Research.
- Asimakopulos, A, 1983. "Kalecki and Keynes on Finance, Investment and Saving," Cambridge Journal of Economics, Oxford University Press, vol. 7(3-4), pages 221-33, September.
- Cutler, David M & Poterba, James M & Summers, Lawrence H, 1991.
Review of Economic Studies,
Wiley Blackwell, vol. 58(3), pages 529-46, May.
- Culter, D.M. & Poterba, J.M. & Summers, L.H., 1990. "Speculative Dynamics," Working papers 544, Massachusetts Institute of Technology (MIT), Department of Economics.
- David M. Cutler & James M. Poterba & Lawrence H. Summers, 1990. "Speculative Dynamics," NBER Working Papers 3242, National Bureau of Economic Research, Inc.
- De Long, J. Bradford & Shleifer, Andrei & Summers, Lawrence H. & Waldmann, Robert J., 1990.
"Noise Trader Risk in Financial Markets,"
3725552, Harvard University Department of Economics.
- Shleifer, Andrei & Summers, Lawrence H, 1990. "The Noise Trader Approach to Finance," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 19-33, Spring.
- Robert Clower, 1999. "Post-Keynes Monetary and Financial Theory," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 21(3), pages 399-414, April.
When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_435. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-Celeste Edwards)
If references are entirely missing, you can add them using this form.