(in Keynesian theory) the preference of investors for holding liquid assets rather than securities or long-term interest-bearing investments.
as modifier liquidity-preference theory
Example sentencesExamples
- To the extent that liquidity preference is satisfied in periods of calm by assets that prove to be illiquid in periods of stress, the system is rendered more unstable.
- In effect, ‘the classical version is superior because it avoids the confusion between money and credit which Friedman correctly notes as plaguing the Keynesian monetary or liquidity preference theory of interest’.
- What we now call real balances or liquidity preference was long appreciated and treated as hoarding.
- He began his career as a Keynesian economist at Cambridge, leaning to liquidity preference theory against Robertson's loanable funds theory in the Cambridge monetary controversies.
- Increasingly, the monetary stimulus of the Federal Reserve is being more than offset by a shift in liquidity preference toward consumers rebuilding their hitherto non-existent household savings.