Silvio Gesell: 'a strange, unduly neglected' monetary theorist

Cordelius Ilgmann

No 23, CAWM Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)

Abstract: Given the renewed interest in negative interest rates as method for removing the floor to nominal interest rates, this article offers a concise review of Gesell's life, work and its place in the history of economic thought. It provides a brief biographical sketch of Gesell, demonstrating both his relative prominence as a social reformer during the interwar years as well as his close affiliation with anarchism. The article then gives a concise summary of Gesell's theory of effective demand and interest as expounded in the Natural Economic Order, the former being neglected by most scholars working on the subject. Finally, it is demonstrated that Keynes endorsement of Gesell as a strange, unduly neglected prophet is another piece of evidence for rejecting Hick's classic interpretation of the General Theory. If one takes Keynes extensive discussion of Gesell's theory of interest as a key for understanding the General Theory, Keynes main innovation of General Theory becomes a monetary theory of interest based on uncertainty that results in liquidity preference. The limited literature on Keynes' link to Gesell, published mainly in the 1940s, has however been widely ignored in the debate about the General Theory.

Keywords: History of Economic Thought; Theory of Interest; Negative Interest Rates; John Maynard Keynes; Silvio Gesell (search for similar items in EconPapers)
JEL-codes: B19 B22 B31 E49 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/51275/1/67178983X.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:23

Access Statistics for this paper

More papers in CAWM Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().