THE PRESENT STATE OF MONETARY THEORY

抄録

A discussion of the present state of monetary theory must concern itself largely with the conflict that has occurred over the past ten or twenty years between Keynesian ideas on the one hand and the earlier views associated with the quantity theory of money on the other hand. Before 1935 or so, it would have been said that there was a well developed and widely accepted monetary theory. Most scholars in the academic world held views generally described under the heading, the quantity theory of money.
In the middle 1930's, the Keynesian revolution occurred. One of its main features was an attack on the quantity theory of money. By the end of World War II, there was almost as much agreement among economists as there had been in, say, 1930; but agreement on almost exactly opposite views. It was widely agreed that money is of little importance, that it is a minor part of the economic system, and that if one wants to understand the way the economic system works, it is better to concentrate on investment or autonomous expenditures, the consumption function, and similar relations.
In the nearly two decades since then, there has again been a radical change in attitudes. There has been something of a counter-revolution in thinking about the behavior of money. Economists today attach much more importance to monetary factors than they did ten or fifteen years ago. As a result, there has been a revival of interest in monetary theory and in the quantity theory of money. But like every successful counter-revo-lution, this one has not brought us back to the position from which we started but to a somewhat different position, one that has been very much influenced by Keynesian ideas. In discussing this broad topic, I shall first briefly summarize the quantity theory of money as it stood before the Keynesian revolution, then discuss the Keynesian attack, and the post-Keynesian reaction. I shall then turn to the developments in the theory of money that have followed that reaction with particular emphasis on the theory of the demand for money as it has developed and expanded in recent years.