The General Theory of Employment, Interest and Money: The Keynesian Revolution by John Maynard Keynes

Author:John Maynard Keynes [Keynes, John Maynard]
Language: eng
Format: epub, pdf
Tags: Political Science, Political Economy, pol_guide
ISBN: 9781492844754
Google: ucKvngEACAAJ
Amazon: 1492844756
Publisher: Createspace Independent Pub
Published: 2013-09-15T05:00:00+00:00

(i) The Income-motive. — One reason for holding cash is to bridge the interval between the receipt of income and its disbursement. The strength of this motive in inducing a decision to hold a given aggregate of cash will chiefly depend on the amount of income and the normal length of the interval between its receipt and its disbursement. It is in this connection that the concept of the income-velocity of money is strictly appropriate.

(ii) The Business-motive. — Similarly, cash is held to bridge the interval between the time of incurring business costs and that of the receipt of the sale-proceeds; cash held by dealers to bridge the interval between purchase and realization being included under this heading. The strength of this demand will chiefly depend on the value of current output (and hence on current income), and on the number of hands through which output passes.

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