Given the renewed interest in negative interest rates as method for removing the floor to nominal interest rates, this article offers a concise review of Gesell’s life, work and its place in the history of economic thought. It provides a brief biographical sketch of Gesell, demonstrating both his relative prominence as a social reformer during the interwar years as well as his close affiliation with anarchism. The article then gives a concise summary of Gesell’s theory of effective demand and interest as expounded in the Natural Economic Order, the former being neglected by most scholars working on the subject. Finally, it is demonstrated that Keynes endorsement of Gesell as a strange, unduly neglected prophet is another piece of evidence for rejecting Hick’s classic interpretation of the General Theory. If one takes Keynes extensive discussion of Gesell’s theory of interest as a key for understanding the General Theory, Keynes main innovation of General Theory becomes a monetary theory of interest based on uncertainty that results in liquidity preference. The limited literature on Keynes’ link to Gesell, published mainly in the 1940s, has however been widely ignored in the debate about the General Theory. –
- Welcome to PoliEcon.com, we compile papers from nep.repec.org. We hope to form an engaging and stimulating environment for those interested in economics and politics, and anything inbetween. Researchers, students, and laymen are all welcome. All posts link to a full version of the paper. I share my personal stuff at EconJive.com.
Categories
Recent Search Terms
- fiscal multiplier
- Price Leadership supermarket
- causes of the icelandic financial crisis
- velocity of money in japan
- friendship effects for adolescents
- sukuk benefits
- auerbach and gorodnichenko (2011)
- the effects of quantitative easing on interest rates:channels and implications for policy
- the linear city
- stubborness in learning
My Personal Studies