ABSTRACT
The aim of this paper is to compare Hicks’ and Lindahl’s views on stability in economies with inside money. This comparison is fruitful since they share a different approach to the problem from that which prevailed in economic debates in the postwar period. In Keynesian macromodels with money the existence and stability of equilibrium was either simply assumed or demonstrated by relying on some real balance effect mechanism following Patinkin’s work (Money, Interest and Prices).
