TAXONOMY OF MARKET ECONOMIES AND THE MONETARY DETERMINATION OF THE EFFECTIVE DEMAND

Abstract

This paper analyses the concept of monetary economies developed by Keynes, using some of his less known manuscripts and articles. It is argued that the exclusion of the taxonomy of market economies in the General Theory' helped the neoclassical re-interpretation of Keynes’ theory of employment. If such taxonomy was included, the principle of effective demand would have a more clear monetary dimension. The article analyses the logic connections between money, teal time, expectations and uncertainty and also presents Keynes' taxonomy of market economies. It also deals with the dynamic fluctuation of the effective demand ind a monetary economy.