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What happens in recessions? A value-theoretic approach to Liquidity Preference


  • Freeman, Alan


This paper develops the paper entitled ‘‘Time, the Value of Money and the Quantification of Value’ which was presented at the conference of the Middle East Technical University in September 1998. It presents the case for a value-theoretic treatment of liquidity preference in axiomatic form, based on a temporal analysis. It discusses why temporal analysis is universally excluded from economic discourse. It argues that economic thought is divided not by the schism between classical and marginal, but the chasm between time and equilibrium. This divide is found in more or less every branch and every period in the history of economic thought; the classical variant of equilibrium appeared as Say’s Law, while the Austrians tried to become the temporal variant of marginalism. It suggests that the ‘Weintraub-Davidson-Eichner’ project is an attempt to identify what ‘temporalist’ approaches have in common. It argues there is a new element to this project, namely the growing body of evidence that Marx, too, was a temporalist, and that the temporal interpretation of Marx has more in common with Post-Keynesianism than it has with the rest of Marxism.

Suggested Citation

  • Freeman, Alan, 1998. "What happens in recessions? A value-theoretic approach to Liquidity Preference," MPRA Paper 2572, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:2572

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    Cited by:

    1. Freeman, Alan & Kliman, Andrew, 1998. "Simultaneous and Temporal Valuation Contrasted," MPRA Paper 52805, University Library of Munich, Germany, revised 23 Sep 1998.

    More about this item


    Liquidity; Value; Quantification; MELT; MEL; Money; Labour; Marx; TSSI; Temporalism;

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)


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