James Tobin on Demand for Money - Dictionary of Arguments
Mause I 225
Demand for Money/Keynesianism/Tobin: The Keynesian theory of money demand in the tradition of James Tobin(1) largely takes up the considerations of monetarist theory.
(Economic policy/Monetarism: Thesis: All economic policy interventions are (...) assessed on the extent to which they influence the overall economic interest rate level. An expansive monetary policy initially causes interest rate cuts (liquidity effect) and thus considerable effects on the goods markets in the form of volume and price adjustments.
Tobin: Thesis: Market participants have a wealth of different investment opportunities for their assets. However, the portfolio theoretical transmission process calls into question the high substitutability between the individual asset classes. (...) This restricts the effectiveness of monetary policy.
1. James Tobin, “The Interest Elasticity of the Transactions Demand for Cash”. Review of Economics and Statistics. 38 (3), 1956, S. 241– 247._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
The Interest Elasticity of the Transactions Demand for Cash 1956
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