Liquidity Preference as Behavior towards Risk
TL;DR: In this article, the authors derived the liquidity preference schedule from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.
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Abstract: One of basic functional relationships in the Keynesian model of the economy is the liquidity preference schedule, an inverse relationship between the demand for cash balances and the rate of interest. This aggregative function must be derived from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.
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References
The Utility Analysis of Choices Involving Risk
TL;DR: In this paper, the authors suggest that an important class of reactions of individuals to risk can be rationalized by a rather simple extension of orthodox utility analysis, i.e., individuals frequently must, or can, choose among alternatives that differ, among other things, in the degree of risk to which the individual will be subject.
3.2K
An axiomatic approach to measurable utility
I. N. Herstein,John Milnor +1 more
TL;DR: In this article, the topology of the prospect space itself is removed, the previous axioms are weakened, an infinite number of sure prospects are allowed, and the existence of a measurable utility is established.
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Rational Behavior, Uncertain Prospects, and Measurable Utility (1950)
TL;DR: In this paper, it is shown that if the economists' theory of assets is completed by a fourth postulate on rational choice, then utility can be defined as a quantity whose mathematical expectation is maximized by the rational man.
486
Speculation and Economic Stability
TL;DR: In this article, the authors examine the effects of speculation on economic stability and show that speculative purchases and sales do not necessarily fall into this category, since the main motivation behind such actions is the expectation of a change in the relevant prices relatively to the ruling price and not a gain accruing through their use, or any transformation effected in them or their transfer between different markets.