Hostname: page-component-cb9f654ff-9b74x Total loading time: 0 Render date: 2025-08-18T02:35:17.169Z Has data issue: false hasContentIssue false
  • English
  • Français

Liquidity Preference and Stock Market Speculation

Published online by Cambridge University Press:  19 October 2009

Robert E. Krainer
Get access Rights & Permissions [Opens in a new window]

Extract

J. M. Keynes' theory of portfolio management (modified and refined by Tobin)occupied an important role in his analysis of the demand for money. According to this theory, financial investors were thought to vary the composition of their portfolios between money and securities on the basis of expected yields on securities. When yields were expected to rise, investors would shift out of securities and into money. Conversely, when yields were expected to fall, investors would shift out of money and into securities. Hence, the asset, or portfolio, demand for money was argued to be negatively related to the expected yields on securities.

Information

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 4 , Issue 1 , March 1969 , pp. 89 - 97
Copyright
Copyright © School of Business Administration, University of Washington 1969

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

1.Feige, E., “Expectations and Adjustment in the Monetary Sector”, American Economic Review, Vol. LV (May 1967).Google Scholar
2.Fuller, W. A., and Martin, J. E., “The Effect of Autocorrelated Errors on the Statistical Estimation of Distributed Lag Models”, Journal of Farm Economics, Vol. LXIII (February 1961).Google Scholar
3.Keynes, J. M., The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace and Co., 1936).Google Scholar
4.Teigen, R. L., “Demand and Supply Functions for Money in the United States: Some Structural Estimates”, Econometrica, Vol. XXXII (October 1964).Google Scholar
5.Teigen, R. L., “The Demand For and Supply of Money,” in Smith, W. L. and Teigen, R. L. (eds), Readings in Money, National Income, and Stabilization Policy (Homewood, Ill.: Richard D. Irwin, Inc., 1965).Google Scholar
6.Tobin, J., “The Interest Elasticity of Transaction Demand for Cash”, Review of Economics and Statistics, Vol. XXXVIII (August 1956).Google Scholar
7.Tobin, J., “Liquidity Preference and Monetary Policy”, Review of Economics and Statistics, Vol. XXIX (May 1947).Google Scholar
8.Tobin, J., “Liquidity Preference as Behavior Toward Risk”, The Review of Economics Studies, Vol. XXV (February 1958).Google Scholar
9.Zellner, A., Huang, D. S., and Chau, L. C., “Further Analysis of the Short-Run Consumption Function with Emphasis on the Role of Liquid Assets”, Econometrica, Vol. XXXIII (July 1965).Google Scholar