Loanable Funds Versus Liquidity Preference — The Hicks-Hansen Framework

John R. Presley

Chapter 12 in Robertsonian Economics, 1978, pp 186-215 from Palgrave Macmillan

Abstract: Abstract Two developments evident from published articles and from correspondence particularly between Keynes and Hicks,1 indicate that Keynes moved a substantial way back to Robertsonian, and classical, interest theory after 1936, such that he no longer neglected the influence of productivity and thrift upon the interest rate. These were: i) Keynes’ general acceptance of the IS-LM framework put forward by J. Hicks (and later by A. Hansen),2 ii) The introduction of the concept of ‘finance’ in discussing the financial provision for the increment in investment in the multiplier process. In this section we concentrate upon the former by examing the consequences of the Hicks-Hansen framework upon the role of productivity and thrift in affecting output, employment and the rate of interest. The concept of finance is a subject of a later section.

Keywords: Interest Rate; Money Supply; Real Income; Market Rate; Speculative Demand (search for similar items in EconPapers)
Date: 1978
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-03239-6_18

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DOI: 10.1007/978-1-349-03239-6_18

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