On Professor Patinkin’s Money, Interest, and Prices

The purpose of this essay is to point out two errors which exist in Patinkin’s Money, Interest and Prices. The aim is to show that the rehabilitation of the neoclassical theory of money and interest is not convincing. I shall try to show that Patinkin’s refined version of the quantity theory presents the same pitfalls as the older versions; that his attack on the Keynesian theory of liquidity preference misses the point, while his theory of the demand for money and of the rate of interest is open to many objections.