IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/mf2sc.html
   My bibliography  Save this paper

Journal of the History of Economic Thought Preprints - Keynes, Public Debt and the Complex of Interest Rates

Author

Listed:
  • Aspromourgos, Anthony

Abstract

John Maynard Keynes consistently offered qualified endorsement of Abba Lerner’s “functional finance” doctrine – the qualifications particularly turning on Keynes’s attentiveness to policy management of the psychology of the debt market. This article examines Keynes’s understanding of the possible influence of public debt on interest rates, from 1930 forward. With the multiplier a mechanism whereby debt-financed public investment generates matching private saving (net of private investment) plus public saving, it becomes possible for Keynes to conclude that increasing public debt need not place upward pressure on the level of interest rates, so long as policy can successfully manage the psychology of the debt market. This particularly concerns long interest rates and hence, the term structure of rates. His theory of the term structure enables Keynes’s conviction that policy can manage and shape long rates. The conclusion considers also whether Keynes’s caution concerning public debt and interest rates retains relevance today.

Suggested Citation

  • Aspromourgos, Anthony, 2018. "Journal of the History of Economic Thought Preprints - Keynes, Public Debt and the Complex of Interest Rates," SocArXiv mf2sc, Center for Open Science.
  • Handle: RePEc:osf:socarx:mf2sc
    DOI: 10.31219/osf.io/mf2sc
    as

    Download full text from publisher

    File URL: https://osf.io/download/5ac47eee29ad60000c32c07e/
    Download Restriction: no

    File URL: https://libkey.io/10.31219/osf.io/mf2sc?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tony Aspromourgos, 2019. "The Past and Future of Keynesian Economics: A Review Essay," History of Economics Review, Taylor & Francis Journals, vol. 72(1), pages 59-78, January.
    2. Biagio Bossone, 2021. "Exercising Economic Sovereignty in Today's Global Financial World: The Lessons from John Maynard Keynes," Working Papers PKWP2120, Post Keynesian Economics Society (PKES).
    3. Biagio Bossone, 2020. "Why MMT can’t work: A Keynesian Perspective," Working Papers PKWP2020, Post Keynesian Economics Society (PKES).
    4. Biagio Bossone, 2021. "Why MMT can’t work," International Journal of Economic Policy Studies, Springer, vol. 15(1), pages 157-181, February.

    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:osf:socarx:mf2sc. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: OSF (email available below). General contact details of provider: https://arabixiv.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.