Keynes on Monetary Policy, Finance and Uncertainty

Description

This book provides a reassessment of Keynes’ theory of liquidity preference. It argues that the failure of the Keynesian revolution to be made in either theory or practice owes importantly to the fact that the role of liquidity preference theory as a pivotal element in Keynes’ General Theory has remained underexplored and indeed widely misunderstood even among Keynes’ followers and until today. The book elaborates on and extends Keynes’ conceptual framework, moving it from the closed economy to the global economy context, and applies liquidity preference theory to current events and prominent hypotheses in global finance.

Jörg Bibow presents Keynes’ liquidity preference theory as a distinctive and highly relevant approach to monetary theory offering a conceptual framework of general applicability for explaining the role and functioning of the financial system. He argues that, in a dynamic context, liquidity preference theory may best be understood as a theory of financial intermediation. Through applications to current events and prominent hypotheses in global finance, this book underlines the richness, continued relevance, and superiority of Keynes’ theory of liquidity preference; with Hyman Minsky standing out for developing Keynes’ vision of financial capitalism.

Reviews

"I do not think anyone has exceeded, let alone matched, Bibow’s ability to think within Keynes’s own multi-dimensional, rich approach to economic theory and the provision of policies based upon it. …

The end result is a volume of profound scholarship and fundamental analysis of the workings of the modern interrelated capitalist world, emphasising especially the central role of Keynes’s liquidity preference theory of the rate of interest in theory and in the design of appropriate policies with which to tackle the fall out from the present crisis and its long-term aftermath."

Geoff Harcourt, University of Cambridge

Contents

1. The triumph of Keynesianism? The role of liquidity preference theory in Keynes’ heresy 2. Some reflections on Keynes’ "finance motive" for the demand for money 3. The loanable funds fallacy: exercises in the analysis of disequilibrium 4. On Keynesian theories of liquidity preference 5. On exogenous money and bank behavior: The Pandora’s box kept shut in Keynes’ theory of liquidity preference? 6. Keynes on central banking and the structure of monetary policy 7. The international monetary order and global finance: Keynes’ vision and ideas 8. On what became of Keynes’ vision at Bretton Woods and some recent issues in global finance 9. Taking liquidity preference theory seriously

Author Bio

Jorg Bibow is Associate Professor of Economics at Skidmore College, New York, USA and Research Associate at the Levy Economics Institute of Bard College, Annandale-on-Hudson, New York, USA

Related Subjects

1. Monetary Economics
2. History of Economic Thought
3. Banking