Demand for Money: The Post-Keynesian Approach
After studying this topic, you should be able to understand
- The post Keynesian theories like the portfolio theories lay emphasis on the store of value function of money.
- The transactions theories lay more emphasis on the medium of exchange function of money.
- The Baumol-Tobin model of transactions demand for money lays stress on the fact that the holding of money by the individual transactor in his asset portfolio involves both a cost and a benefit.
- Friedman’s theory of demand for money is partly Keynesian and partly non-Keynesian.
- Friedman ignores the motives for holding money and takes it for granted that people will certainly hold money.
As already discussed in Chapter 14 that ...