The Finance Motive, Keynes and Post Keynesians

Stephen Rousseas

Chapter 4 in Money and Production, 2024, pp 78-90 from Edward Elgar Publishing

Abstract: This paper proposes a reconsideration of Keynes’s original conception of the finance motive and its development by American post-Keynesians. The financial demand for money is seen as a short-term phenomenon taking place during an investment boom when the revolving fund of credit is incapable of meeting the increased demand for transactions balances. The overall conclusion is that Keynesians and their post-Keynesian followers have overstated their case and that an opportunity was missed by Keynes in moving his Treatise to the General Theory, to link the demand for money with his concept of ‘industrial circulation’ in preference to the asset-bond model of the General Theory.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2024
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