Monday, September 22, 2014

Lars P. Syll — Keynes vs. Wicksell on loanable funds theory

"The fundamental difference between Keynes and Wicksell and in general the supporters of the LFT [Loanable Funds Theory] lies in the specification of the consequences of the presence of bank money.…
In contrast, Keynes states that the spread of a fiat money such as bank money changes the structure of the economic system. He underscores this point by introducing the distinction between a real exchange economy and a monetary economy.…
Keynes notes that the classical economists formulated an explanation of how the real-exchange economy works, convinced that this explanation could be easily applied to a monetary economy. He believed that this conviction was unfounded …" — Giancarlo Bertocco
Lars P. Syll’s Blog
Keynes vs. Wicksell on loanable funds theory
Lars P. Syll | Professor, Malmo University

No comments: