[Download] ~ Keynes's Approach to Money: An Assessment After Seventy Years. * by Atlantic Economic Journal ~ Book PDF Kindle ePub Free
eBook details
- Title: Keynes's Approach to Money: An Assessment After Seventy Years.
- Author : Atlantic Economic Journal
- Release Date : January 01, 2006
- Genre: Business & Personal Finance,Books,
- Pages : * pages
- Size : 263 KB
Description
Keynes's Money Supply and Money Demand Approach Chapter 13 of Keynes's The General Theory of Employment Interest and Money [Keynes, 1964] is devoted to answering the question: What determines the rate of interest? First, he narrows the scope by defining the rate of interest as "the inverse proportion between a sum of money and what can be obtained for parting with control over the money in exchange for a debt for a stated period of time" [Keynes, 1964, p. 167]. It is, thus, "the reward for parting with liquidity" [Keynes, 1964, p. 167]. This leads rather inexorably to the conclusion that the interest rate is "the 'price' which equilibrates the desire to hold wealth in the form of cash with the available quantity of cash" [Keynes, 1964, p. 167]. This desire is "liquidity preference," which is "substantially the same thing" as "propensity to hoard"--so long as that is not confused with "hoarding" [Keynes, 1964, p. 174]. As he cautions, an increase in liquidity preference cannot increase the quantity of hoards, "[f]or the amount of hoarding must be equal to the quantity of money ... and the quantity of money is not determined by the public" [Keynes, 1964, p. 174].
