One of the Three Motivations of Keynesian Money Demand Theory
The transaction motive is Keynesian money demand theory One of the three main motives of the "money" policy is that individuals and enterprises need money for normal trading activities. Since income and expenditure are not synchronized in time, individuals and enterprises must have sufficient monetary capital to pay for daily expenses. The amount of money needed by individuals or enterprises for this transaction motivation depends on the income level, as well as practices and commercial systems, which can be generally assumed to be fixed in the short term. Therefore, according to Keynes, the amount of money demand for transaction motivation mainly depends on income. The higher the income, the greater the number of transactions. The larger the number of transactions, the higher the price of the goods and services exchanged, and the greater the amount of money needed to meet daily expenses. [1] - Chinese name
- Transaction motivation
- Time of occurrence
- 1936
definition
Keynes published《 General Theory of Employment, Interest and Money 》, proposed his own Money demand theory 。 think Economies Money is needed because it exists“ Liquidity preference ”This general psychological tendency is to be willing to hold fully liquid currency rather than other illiquid assets to deal with daily, temporary or Speculation Needs, resulting in money demand 。 Transaction motivation refers to the desire to hold money for daily transactions due to the inconsistency of income and expenditure time.
