The Tract on Monetary Reform as a precursor to Keynes' General Theory
Borg, Stephen Paul
Master of Arts
This paper proposes a series of links between Keynes' Tract on Monetary Reform and his General Theory. Economists generally associate "Keynesianism” with the specific ideas represented in the General Theory. But many of the concepts presented in that book have been traced to earlier works by Keynes. Schumpeter finds the beginnings of the Keynesian "modern stagnation hypothesis" in The Economic Consequences of the Peace, which was written chronologically before the Tract on Monetary Reform. In the Tract, we find a concern with the saving-investment mechanism, the beginnings of liquidity preference, a link between increases in risk and unemployment, a stress upon monetary dynamics and a reaction against what Harrod calls the "cruder form" of the Quantity Theory Of money, and other interesting ties between the Tract on Monetary Reform and the General Theory.