LIQUIDITY PREFERENCE AND LOANABLE FUNDS THEORIES, MULTIPLIER AND VELOCITY ANALYSES: A SYNTHESIS.
The great polemics of thirties between proponents of liquidity preference and loanable funds theories of interest have flared up again recently. Nevertheless, no general agreement seems to have been reached on the two main issues namely similarity in two theories and if they are not similar than whi...
| Publicado en: | American Economic Review Vol. 46; no. 4; pp. 539 - 565 |
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| Formato: | Artículo |
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American Economic Association
Sep56
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=8798187&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 8798187 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00028282 AER jtl: American Economic Review issn: 00028282 maglogo: N pubinfo: dt: Sep56 vid: 46 iid: 4 pid: 22 pub: American Economic Association artinfo: ui: 8798187 ppf: 539 ppct: 26 formats: tig: atl: LIQUIDITY PREFERENCE AND LOANABLE FUNDS THEORIES, MULTIPLIER AND VELOCITY ANALYSES: A SYNTHESIS. aug: au: Tsiang, S. C. affil: Economist Of The International Monetary Fund. su: Demand for money Loans Supply & demand Finance Income Theory Money supply Interest rates Markets sug: subj: Demand for money Loans Supply & demand Finance Income Theory Money supply Interest rates Markets ab: The great polemics of thirties between proponents of liquidity preference and loanable funds theories of interest have flared up again recently. Nevertheless, no general agreement seems to have been reached on the two main issues namely similarity in two theories and if they are not similar than which theory is correct. The purpose of the first two parts of this paper is to show that two theories are indeed identical in the sense that two sets of demand and supply functions, that is, the demand for and the supply of loanable funds, and the demand for money to hold and the stock of money in existence, would determine the same rate of interest in all circumstances, if both sets of demand and supply functions are formulated correctly in the ex ante sense. The third part shows that the reconciliation between loanable funds and liquidity preference theories of interest provides also a key for the reconciliation of the multiplier and velocity analyses of income expansion. To give a convincing demonstration of the equivalence of two theories, one must explain how the decision of any economic subject on how much to borrow or to lend necessarily implies a corresponding decision to hold money for one purpose or another. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y dt: @attributes: year: 1956 holdings: @attributes: islocal: N |
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