“Liquidity Preference as Behavior Towards Risk”
E790041
“Liquidity Preference as Behavior Towards Risk” is a seminal 1958 paper by economist James Tobin that reformulates Keynesian liquidity preference theory using modern portfolio theory to explain money demand as a response to risk and uncertainty.
Observed surface forms (1)
| Surface form | Occurrences |
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| Liquidity Preference as Behavior Towards Risk | 0 |
Statements (42)
| Predicate | Object |
|---|---|
| instanceOf |
academic paper
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economics paper ⓘ |
| approach |
expected utility framework (implicit)
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mean-variance analysis ⓘ |
| author | James Tobin NERFINISHED ⓘ |
| contribution |
formalizes the tradeoff between risk and return in holding money versus bonds
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interprets money demand as a response to risk and uncertainty ⓘ introduces mean-variance analysis into the theory of money demand ⓘ links liquidity preference to behavior toward risk rather than only to interest rate levels ⓘ reformulates Keynesian liquidity preference as a problem of portfolio selection under risk ⓘ shows that risk-averse agents hold money as part of an optimal portfolio ⓘ |
| countryOfOrigin |
United States of America
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surface form:
United States
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| field |
financial economics
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macroeconomics ⓘ monetary economics ⓘ portfolio theory ⓘ |
| influenced |
macroeconomic models incorporating portfolio balance
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modern monetary economics ⓘ subsequent theories of money demand ⓘ theory of asset demand under uncertainty ⓘ |
| influencedBy |
John Maynard Keynes
NERFINISHED
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Keynesian economics NERFINISHED ⓘ emerging portfolio selection theory ⓘ |
| keyConcept |
bond-holding under uncertainty
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expected return ⓘ money as a risky asset ⓘ portfolio diversification ⓘ risk aversion ⓘ tradeoff between liquidity and yield ⓘ variance of returns ⓘ |
| language | English ⓘ |
| mainTopic |
asset allocation
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liquidity preference ⓘ money demand ⓘ portfolio choice ⓘ risk and uncertainty ⓘ |
| notableFor |
being a seminal paper in the portfolio-theoretic analysis of money demand
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bridging Keynesian liquidity preference and modern portfolio theory ⓘ influencing later work on risk, uncertainty, and asset demand ⓘ |
| publicationYear | 1958 ⓘ |
| theoreticalFramework |
Keynesian liquidity preference theory
NERFINISHED
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modern portfolio theory NERFINISHED ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.