Robert Bigg · @RobertBigg
28 followers · 27 posts · Server econtwitter.net

Ultimately I have to return to c1933. where he related to a three dimensional relationship between the state of the news (), the , and the quantity of . Fixing any one of these left the adjustment between the other two. In particular this thinking allowed the rate of interest to be determined exogenously. Perhaps the failure to grasp this is one factor behind the subsequent success of 
[ends]

#keynes #liquiditypreference #expectations #rateofinterest #money #ISLM

Last updated 2 years ago

Robert Bigg · @RobertBigg
28 followers · 27 posts · Server econtwitter.net

So, it seems to me, that pretty much all the paraphernalia of economic theory can help explain is a structure of interest rates (, , , etc), but not its level or even what the level ought to be in terms of some Wicksellian natural rate. Or, like Picketty, we can look at historical norms.

#risk #expectations #profit #liquiditypreference

Last updated 2 years ago

Robert Bigg · @RobertBigg
28 followers · 27 posts · Server econtwitter.net

Keynesian gives a sense to the structure of rates, the yield curve. It provides nothing in terms of the level. The mystery as to what might determine the rate remains.

#liquiditypreference #profit

Last updated 2 years ago