From Keynes' Liquidity Preference to Gesell's Basic Interest

Research output: Working paperDiscussion paper

Abstract / Description of output

In his General Theory of Employment, Interest and Money, John Maynard Keynes devotes a section in chapter 23 on the theories of Silvio Gesell, best known for the proposal to use stamped money. Although the account is generally favourable, Keynes finds a great defect in Gesell's theory. We look carefully at this section together with Keynes' own theory of liquidity preference which Keynes considers a completion of Gesell's deep insights. We will argue that Keynes' was in fact mistaken on the defect and that although both Keynes and Gesell identify the same theoretical problem, a special role that money plays in preventing the optimal accumulation of capital, it is only Gesell's reform that in theory provides a solution.
Original languageEnglish
Place of PublicationEdinburgh
PublisherEdinburgh School of Economics, University of Edinburgh
Pages1-77
Number of pages78
Publication statusPublished - 31 Dec 2020

Publication series

NameEdinburgh School of Economics Discussion Paper Series
PublisherEdinburgh School of Economics, University of Edinburgh
No.299

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