ABSTRACT
The liquidity premium attached to money permeated the development of Keynes’s monetary theory of value, culminating in its appearance in Chapter 17 of The General Theory and the famous 1937 Quarterly Journal of Economics article. Liquidity, 1 inherent in private and collective monetary arrangements, is a consequence of one of the social conventions that permit rational action in an uncertain world. By an uncertain world, we mean one in which the knowledge which we must have in order to know fully, if stochastically, the consequences of our acts is in principle unattainable (O'Donnell 1989, 1990a; Runde 1994a ; Rymes 1994).
