Write a note on port folio theories of demand for mooney
Answers
Answered by
0
Theories of Demand of Money: Tobin’s Portfolio and Baumol’s Inventory Approaches!
By introducing speculative demand for money, Keynes made a significant departure from the classical theory of money demand which emphasized only the transactions demand for money. However, as seen above, Keynes’ theory of speculative demand for money has been challenged.
The main drawback of Keynes’ speculative demand for money is that it visualises that people hold their assets in either all money or all bonds. This seems quite unrealistic as individuals hold their financial wealth in some combination of both money and bonds.
By introducing speculative demand for money, Keynes made a significant departure from the classical theory of money demand which emphasized only the transactions demand for money. However, as seen above, Keynes’ theory of speculative demand for money has been challenged.
The main drawback of Keynes’ speculative demand for money is that it visualises that people hold their assets in either all money or all bonds. This seems quite unrealistic as individuals hold their financial wealth in some combination of both money and bonds.
Similar questions