What happens in crashes? a non-equilibrium, value-theoretic approach to liquidity preference

Freeman, Alan (1998): What happens in crashes? a non-equilibrium, value-theoretic approach to liquidity preference.

Abstract

This paper, presented at the 1998 conference of the European Association for Evolutionary Political Economy in Lisbon, shows how variations in the value of money, and in the exchange rate between different moneys of account, lead to transfers of value on the one hand between national or continental monetary blocs and on the other, between the financial and productive sectors of a single national economy.

It discusses how these transfers may serve as the mechanism underlying the business cycle and suggests that they may also account for the phenomenon of liquidity preference. It suggests that the concept of liquidity preference constitutes a potential common ground between value-theoretic and post-Keynesian schools of thought.

It is set against the background of the 1997 Asian crisis and reflects on the role and reliability of the economics profession.

• Item Type: MPRA Paper
• Institution: The University of Greenwich
• Language: English
• Keywords: Liquidity; Value; Quantification; MELT; MEL; Money; Labour; Marx; TSSI; Temporalism
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B20 - General; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B24 - Socialist ; Marxist ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B50 - General

References

Arestis, P (1988) 'Post-Keynesian Theories of Money, Credit and Finance' in Arestis, P (ed) (1988) Post-Keynesian Monetary Economics, London:Elgar

Cockshott, P, A. Cottrell and G Michaelson (1995) 'Testing Marx: some new results from UK data' Capital and Class 55.

Davis, John B. (1992) The Economic Surplus in Advanced Economies. Aldershot and Vermont: Elgar

Dunne, Paul (1991) Quantitative Marxism, Cambridge: Polity Press

Fazeli, R (1996) The Economic Impact of the Welfare State and the Social Wage Aldershot: Avebury

Freeman, A. and Carchedi, G. (1995) Marx and Non-Equilibrium Economics, Cheltenham: Edward Elgar

Keynes, J. M. (1977) The General Theory of Employment, Interest and Money. London:McMillan

Maniatis, T (1996) ‘Testing Marx: a Note’, Capital and Class Autumn 1996

Marx, K.(1976), Capital: a critique of Political Economy; Volume I. Harmondsworth:Penguin

Moore, B.J. (1979) 'Monetary Factors', in Eichner, A.S. (ed) (1979) A Guide to Post-Keynesian Economics, London:McMillan

Ochoa, E.M. (1985) ‘Labor Values and Prices of Production: an Inter-Industry Study of the U.S. Economy, 1947-1972, PhD Thesis, New School for Social Research