chapter  9
Monetary Production Economy Versus Real Exchange Economy
Pages 11

Introduction When he was preparing the General Theory, in 1933, Keynes intended to elaborate a “monetary theory of production” that would have been in sharp contrast to the (neo) classical theory. To that end, he opposed the “monetary economy of production” that, according to him, is the actual economy, which he also called an “entrepreneur economy” or a “money-wage economy,” to the “real exchange economy” depicted by his predecessors. In the biography of Keynes, Moggridge argued that Keynes could not achieve his goal, so that he “dropped the whole notion as unable to do the job he wanted it to – to isolate the distinguishing characteristics of what he called classical economics” (Moggridge 1992: 561). Then, Keynes would have turned to the analysis of the liquidity preference and the equilibrating role of fluctuations in output.