Why Keynes’ A Treatise On Money Might Have Greater Relevance Today Than His General Theory?

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2008-6

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Ertürk, Korkut A.

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Asset price speculation has come to play a central role in economic life in the age financial liberalization in a way that is reminiscent of the era right before the Great Depression. In his A Treatise on Money, financial variables and asset price speculation was an integral part of Keynes’ account of the business cycle dynamics. In his General Theory, Keynes commented on financial markets extensively, but did not use his insights on asset price speculation explicitly in his theory of output determination. In later years, Minsky’s interpretation of the General Theory bridged this gap in Keynes’ two works, by reviving his earlier emphasis on financial variables and speculation. But the paper argues that Minsky might not have gone far enough, on account of having overlooked that part of Keynes’ argument in the Treatise on asset price speculation which is of relevance in understanding business cycle dynamics today.

Subject Keywords

Keynesian Economics, Minsky, Two-Price Theory, Speculation, Financial Fragility

URI

https://hdl.handle.net/11511/58415

Journal

ODTÜ Gelişme Dergisi

Collections

Department of Economics, Article

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Citation Formats

K. A. Ertürk, “Why Keynes’ A Treatise On Money Might Have Greater Relevance Today Than His General Theory?,” ODTÜ Gelişme Dergisi, vol. 35, no. 1, pp. 101–120, 2008, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/58415.