Liquidity Preference as Behavior Towards Risk | Zendy

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Liquidity Preference as Behavior Towards Risk

Author(s) -

James Tobin

Publication year - 1958

Publication title -

the review of economic studies

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 15.641

H-Index - 141

eISSN - 1467-937X

pISSN - 0034-6527

DOI - 10.2307/2296205

Subject(s) - market liquidity , liquidity preference , preference , economics , safe haven , haven , liquidity risk , risk aversion (psychology) , time preference , financial economics , liquidity crisis , monetary economics , actuarial science , microeconomics , expected utility hypothesis , mathematics , combinatorics

One of basic functional relationships in the Keynesian model of the economy is the liquidity preference schedule, an inverse relationship between the demand for cash balances and the rate of interest. This aggregative function must be derived from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.

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