ABSTRACT
Keynes's General Theory of the Rate of Interest has actually conflated two economic systems, the monetary system as operated by the governmental authority or under its supervision and the private market of loanable/investible funds. In general terms Keynes was developing the conception, introduced in his theorizing with Roy Harrod, that changes in the level of income would mean changes in the level of savings, hence in the supply of loanable funds going into the money market. These latter changes would play back upon income, causing more changes. Keynes approached his interest rate through liquidity preference, the degree of an "individual's" desire to retain "liquid control" of his resources. After disputing a lesser point of neoclassical theory, Keynes arrived at a first viewing: "The mere definition of the rate of interest tells in so many words that the rate of interest is the reward for parting with liquidity for a specified period".
