Developments in Cambridge Monetary Theory to 1925

Abstract

Part of the story of the development of the quantity theory in Cambridge in the 1920s is the assimilation of two strands: the Marshall/Pigou approach and the more independent model of Haw-trey. This can be seen as reaching a peak in Robertson’s Banking Policy and the Price Level (1926) which is the subject of a later chapter. The current chapter deals with other elements of the story, specifically Lavington’s and Robertson’s analysis, and in particular their consideration of the role of the banking system. Then, of course, there is Keynes’s Tract on Monetary Reform (1923i) which has been seen both as his most classical quantity theory analysis and as the beginning of his intellectual moves towards the General Theory.