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Keynes and Anchorless Banking

Published online by Cambridge University Press:  11 June 2009

Thomas K. Rymes
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Extract

In The General Theory, John Maynard Keynes broke with the quantity theory of money, not just in working out a monetary theory of production but, as he says, in arguing the case for a monetary theory of value. Keynes writes (CW, 7, pp. xxii-xxiii):

A monetary economy, we shall find, is essentially one in which changing views about the future are capable of influencing the quantity of employment and not merely its direction. But our method of analyzing the economic behaviour of the present under the influence of changing ideas about the future is one which depends on the interaction of supply and demand, and is in this way linked up with our fundamental theory of value. We are thus led to a more general theory, which includes the classical theory with which we are familiar, as a special case.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 20 , Issue 1 , March 1998 , pp. 71 - 82
Copyright
Copyright © Cambridge University Press 1998

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References

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