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Keynes half a century ago : the treatise on money

Published online by Cambridge University Press:  17 August 2016

Philippe Callier
Philippe Callier*
Affiliation:
Concordia University
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Extract

Fifty years ago was published the first major theoretical work of John M. Keynes : The Treatise on Money (1930). The book at the time was not very well received by the profession and the impact of the General Theory, published six years later, soon eclipsed Keynes' earlier contribution to political economy. After 50 years of progress in macroeconomics, the gap between the present state of the science and the original project of Keynes is all the more impressive. A candid look at the Treatise today could remind us of the challenges still open to our profession.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 46 , Issue 2 , June 1980 , pp. 165 - 170
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1980 

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References

1 Keynes, , Treatise on Money, edition of the Royal Economic Society, London (Macmillan) 1971,Google Scholar page XVIII of the first volume. First edition of the Treatise: 1930.

2 Idem, page XVII of volume 1.

3 Idem, page 365 of volume 2.

4 Idem, page 365 of volume 2.

5 The sign ’ adorning some variables is there to signal that these variables are not defined as in the National Accounts : they do not include the fraction of the income of the entrepreneurs resulting from price changes. It is wortwhile to note that these special definitions used by Keynes enabled him to conceive a meaningful relationship — not in identity — between saving and investment without having to use the Myrdalian distinction of the « ex ante » versus the « ex post » concepts.

6 This equation is the theoretical basis for the famous distinction between cost-push inflation (called « income inflation » by Keynes) and demand-pull inflation (called « commodity inflation » in the Treatise) still popular today among the policy makers.

7 Reminder : S‘ = Y’ — C. Thus S’ is equal to the traditional saving of the National Accounts less the exceptional profits of the entrepreneurs induced by price variations.