IDEAS home Printed from https://ideas.repec.org/p/lev/wrkpap/wp_438.html
   My bibliography  Save this paper

Keynes's Approach To Money: An Assessment After 70 Years

Author

Listed:
  • L. Randall Wray

Abstract

This paper first examines two approaches to money adopted by Keynes in the General Theory (GT). The first is the more familiar "supply and demand" equilibrium approach of Chapter 13 incorporated within conventional macroeconomics textbooks. Indeed, even Post Keynesians utilizing Keynes's "finance motive" or the "horizontal" money supply curve adopt similar methodology. The second approach of the GT is presented in Chapter 17, where Keynes drops "money supply and demand" in favor of a liquidity preference approach to asset prices that offers a more satisfactory treatment of money's role in constraining effective demand. In the penultimate section, I return to Keynes's earlier work in the Treatise on Money (TOM), as well as the early drafts of the GT, to obtain a better understanding of the nature of money. I conclude with policy implications.

Suggested Citation

  • L. Randall Wray, 2006. "Keynes's Approach To Money: An Assessment After 70 Years," Economics Working Paper Archive wp_438, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_438
    as

    Download full text from publisher

    File URL: http://www.levyinstitute.org/pubs/wp_438.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. J. Tobin, 1958. "Liquidity Preference as Behavior Towards Risk," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(2), pages 65-86.
    2. Sheila C. Dow, 1993. "Money And The Economic Process," Books, Edward Elgar Publishing, number 147.
    3. Goodhart, Charles A. E., 1998. "The two concepts of money: implications for the analysis of optimal currency areas," European Journal of Political Economy, Elsevier, vol. 14(3), pages 407-432, August.
    4. L. Randall Wray (ed.), 2004. "Credit and State Theories of Money," Books, Edward Elgar Publishing, number 3204.
    5. Geoffrey W. Gardiner, 2004. "The Primacy of Trade Debts in the Development of Money," Chapters, in: L. Randall Wray (ed.), Credit and State Theories of Money, chapter 6, Edward Elgar Publishing.
    6. Victoria Chick, 1983. "Macroeconomics after Keynes: A Reconsideration of the General Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530457, December.
    7. L. Randall Wray, 1998. "Understanding Modern Money," Books, Edward Elgar Publishing, number 1668.
    8. Michael Hudson, 2004. "The Archaeology of Money: Debt versus Barter Theories of Money's Origins," Chapters, in: L. Randall Wray (ed.), Credit and State Theories of Money, chapter 5, Edward Elgar Publishing.
    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. Ariel Dvoskin & German Feldman, 2010. "The Exchange Rate and Inflation in Argentina: A Classical Critique of Orthodox and Heterodox Policy Prescriptions," Forum for Social Economics, Taylor & Francis Journals, vol. 39(2), pages 145-169, January.
    2. Antonio Carlos Macedo e Silva, 2006. "Detalhes Extraviados E Ausências Conspícuas: Do Treatise À General Theory," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 114, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    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. L. Wray, 2006. "Keynes's Approach to Money: An Assessment After Seventy Years," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(2), pages 183-193, June.
    2. Phil Armstrong, 2020. "Can Heterodox Economics Make a Difference?," Books, Edward Elgar Publishing, number 19964.
    3. L. Randall Wray, 2008. "Banking, Finance and Money: A Social Economics Approach," Chapters, in: John B. Davis & Wilfred Dolfsma (ed.), The Elgar Companion to Social Economics, chapter 27, Edward Elgar Publishing.
    4. Thomas Cate (ed.), 2012. "Keynes’s General Theory," Books, Edward Elgar Publishing, number 3855.
    5. L. Randall Wray, 2007. "Endogenous Money: Structuralist and Horizontalist," Economics Working Paper Archive wp_512, Levy Economics Institute.
    6. L. Randall Wray, 2013. "Is there room for bulls, bears and States in the circuit?," Chapters, in: Louis-Philippe Rochon & Mario Seccareccia (ed.), Monetary Economies of Production, chapter 6, pages 54-70, Edward Elgar Publishing.
    7. L. Randall Wray, 2012. "Keynes after 75 Years: Rethinking Money as a Public Monopoly," Chapters, in: Thomas Cate (ed.), Keynes’s General Theory, chapter 15, Edward Elgar Publishing.
    8. Lee, Frederic, 2011. "Heterodox surplus approach: production, prices, and value theory," MPRA Paper 31824, University Library of Munich, Germany.
    9. Louis-Philippe Rochon & Sergio Rossi, 2013. "Endogenous money: the evolutionary versus revolutionary views," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(2), pages 210-229, January.
    10. Pavlina R. Tcherneva, 2016. "Money, Power, and Monetary Regimes," Economics Working Paper Archive wp_861, Levy Economics Institute.
    11. L. Randall Wray, 2011. "Waiting for the Next Crash: The Minskyan Lessons We Failed to Learn," Economics Public Policy Brief Archive ppb_120, Levy Economics Institute.
    12. Stephanie Bell, 1999. "Functional Finance: What, Why, and How?," Economics Working Paper Archive wp_287, Levy Economics Institute.
    13. Klausinger, Hansjörg, 2000. "Walras' law and the IS-LM model. A tale of progress and regress," Department of Economics Working Paper Series 69, WU Vienna University of Economics and Business.
    14. Zdravka Todorova, 2013. "Connecting social provisioning and functional finance in a post-Keynesian–Institutional analysis of the public sector," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(1), pages 61-75.
    15. Alla Semenova & L. Randall Wray, 2015. "The Rise of Money and Class Society: The Contributions of John F. Henry," Economics Working Paper Archive wp_832, Levy Economics Institute.
    16. L. Randall Wray, 2012. "Money in finance," Chapters, in: Jan Toporowski & Jo Michell (ed.), Handbook of Critical Issues in Finance, chapter 33, pages i-ii, Edward Elgar Publishing.
    17. Robert E. Prasch, 2002. "What Is Wrong with Wage Subsidies?," Journal of Economic Issues, Taylor & Francis Journals, vol. 36(2), pages 357-364, June.
    18. Stephanie Bell & L. Randall Wray, "undated". "The War on Poverty After 40 Years: A Minskyan Assessment," Economics Public Policy Brief Archive ppb_78, Levy Economics Institute.
    19. Tanweer Akram, 2021. "A Note Concerning the Dynamics of Government Bond Yields," The American Economist, Sage Publications, vol. 66(2), pages 323-339, October.
    20. Ament, Joe, 2020. "An ecological monetary theory," Ecological Economics, Elsevier, vol. 171(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:lev:wrkpap:wp_438. 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: Elizabeth Dunn The email address of this maintainer does not seem to be valid anymore. Please ask Elizabeth Dunn to update the entry or send us the correct address (email available below). General contact details of provider: http://www.levyinstitute.org .

    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.