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Keynes on the division between money and debts

Keynes on the division between money and debts – Editor

We are grateful to Dr Steven Hail for providing the following quote from John Maynard Keynes [1]:

” Without disturbance to this definition, we can draw the line between “money” and “debts” at whatever point is most convenient for handling a particular problem. For example, we can treat as money any command over general purchasing power which the owner has not parted with for a period in excess of three months, and as debt what cannot be recovered for a longer period than this; or we can substitute for “three months” one month or three days or three hours or any other period; or we can exclude from money whatever is not legal tender on the spot. It is often convenient in practice to include in money time-deposits with banks and, occasionally, even such instruments as (e.g.) treasury bills. As a rule, I shall, as in my Treatise on Money, assume that money is coextensive with bank deposits. ”

1. From his footnote #1 to Chapter 13 of The General Theory, on p 167 of the 1973 MacMillan edition.

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