Post-Keynesian Modifications to the Demand for Money
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In many respects, question usefulness of distinguishing Transactions demand from Asset demand for cash as separate components in total MD.  

1.      Baumol & the Interest Rate Sensitivity of Transactions Demands: Baumol (1952) implies that transactions demand for cash will respond inversely to interest rate changes (ceteris paribus: reinforces i. rate sensitivity of total MD).  (Opportunity cost in i. foregone of cash balance but balanced vs costs of i. yielding assets – liquidation costs/inconvenience – indiv will seek to minimise these total costs.)  So higher i. rate – decrease transactions demand for cash & vice-versa.  + Note: If the act of liquidation costless, there would be no demand for transactions balances (intuitively appealing)

2.      Tobin (1958) & the Keynesian Asset Demand for Cash: reformulation of Keynesian demand for money to meet obj. that indivs’ll often hold speculative balances & financial assets. Allows it.

Other Notes in this Category

1. Classical Monetary Theory – The Traditional Quantity Theory
2. Essential Functions of Money
3. Introduction
4. Post-Keynesian Modifications to the Demand for Money
5. The Keynesian Analysis of the Demand for Money
6. The Revival of the Quantity Theory (Friedman & the ‘Chicago School’)

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