Toward a reconcilement of endogenous money and liquidity preference
نویسنده
چکیده
A theoretical synthesis of endogenous money and liquidity preference is not possible so long as the latter is cognized as a theory of the demand and supply of money. A key step toward the reconcilement of the two theories is a revival of the original version of Keynes’s theory, which appeared in the Treatise on Money as the “theory of bearishness.” The most widely known version of liquidity preference is misspecified in that it conflates two distinct phenomena—changes in money balances required to effect a fluctuating stream of current or planned transactions as against portfolio disequilibrium—into a single demand for money function.
منابع مشابه
Effects of Nonperforming Loans on Endogenous Banking Money Creation and Banking Sector Fragility in Iran
In recent years, a gap between banks’ deposits and loans has been emerging and rather continuously growing. Also, loans to liabilities ratio and liquidity multiplier have been decreased and increased, respectively. Furthermore, a kind of stickiness has been observed in interbank interest rate. The objective of this paper is to explain the mentioned behaviors by investigating the effects of nonp...
متن کاملExcessive Liquidity Preference
Any recession by definition is associated with an excessive liquidity preference. An ex ante excess supply of goods and services, i.e. the demand for goods and services falling short of the base output at the base prices corresponding to that output, which is what a recession is, must be associated with an ex ante excess demand for money at that output and prices. This is simply Walras’ Law. Th...
متن کاملStrategic interaction on Liquidity Risk in Iranian Banks
The peer effects induced by social interactions have been studied empirically for several socio-economic phenomena in the last three decades. Before, economists have considered preferences of actors as exogenous parameters which are a tradition rooted in the work of Milton Friedman. But most recently, many economists have studied processes of preference formation of actors and have developed th...
متن کاملConflicting Interpretations of the Notion of Liquidity Preference: A Review and Synthesis of Post-Keynesian Perspectives A Paper prepared for the 10th HETSA CONFERENCE
In this paper I review recent Post-Keynesian debates about the notion of liquidity preference in the context both of Keynes’ writings on and after the General Theory and also, modern portfolio theory. First, the paper reviews the Hayek-Sraffa debate to focus on certain issues raised by its protagonists which provide a continuing refrain over the years to follow. In particular, this section dwel...
متن کاملNon-Linear Inflationary Dynamics based on the Concept of Missing Money in Iran
In this research, non-linear inflationary dynamics based on the concept of missing money is studied using the threshold autoregressive models based on seasonal data of the time interval (1990:04-2016:07) for the economy of Iran. The finding of the research shows that simple and Divisia liquidity growth variables are determined as threshold variables, and inflation reacts to changes in the growt...
متن کامل