Re: Uncertainty and Liquidity Preference

[paul davidson <pdavidson@xxxxxxx>]

At 06:11 AM 7/16/99 -0700, you wrote:
>
>Paul Davidson wrote:
>
>>If you would read my Post Keynesian Macroeconomic Theory book you would
>>see that money is defined by two functions and two properties.
>
>>The two functions are :
>>1.THE MEDIUM OF CONTRACTUAL SETTLEMENT. (this is not the same as the
>>conventional  theory's medium of exchange)
>>2. A store of value.
>
>
>I know that you have been repeating this a lot, but what I'd like to know
>is how particularly the second function squares with the "Uncertainty" of
>the world we live in?
>Isn't there a fundamental contradiction between these two axioms?
>
>

First of all these two functions are NOT axioms.

Secondly, even in a world of uncertainty -- one needs something to carry
claims to the future.  That is what liquidity is all aboutr. Read about it
in my POST KEYNESIAN MACROECONOMICS THEORY book chapter on liquidity.

Paul