Menger and Keynes: On the demand for money and uncertainty

The aim of the article is to compare the theories of demand for money by C. Menger and J. M. Keynes. The history of economic thought states Keynes’s priority in developing a system of motives for demand for money within the framework of his theory of liquidity preference. Despite the prevailing opinion, in this article it is shown that Menger distinguished the same elements. The basic method is content analysis of Menger’s little-known works of the 1880—1890s, in which he examined the motives of demand for money for transactions, precautionary motive, and the initial outline of a speculative motive. It is important that for both authors the key factor of the precautionary motive is the equally understood uncertainty of the future, and it is this factor that determines the limited impact of increasing the supply of money on economic processes, since economic agents begin to prefer money as a durable asset compared to the investments in productive assets. In the analysis of the current macroeconomic situation, the legacy of such different authors opens up additional prospects for the formation of rethinking economic policy.