But not only does the division of Ointo its component parts R and C give rise to such difficulties. It seems to me that most of the difficulties which arise here are a consequence of the peculiar method of approach adopted by Mr.
Keynes does not explicitly state this, but he includes the remuneration of invested capital in his more comprehensive concept of the "money rate of efficiency earnings of the factors of production" in general, a concept on which I shall have more to say later on.
Economists generally think the rate of interest will not fall below a certain limit, often seen as zero or a slightly negative number. Keynes, and which, of course, disturb all the apparent neatness of his mathematical formulae, there is a further difficulty introduced with these formulae.
Moreover, most of the practical conclusions seem to harmonize with what seems to the man in the street to be the dictates of common sense, and the favorable impression thus created will probably not be diminished at all by the fact that they are based on a part of the work Books III and IV which is so highly technical and complicated that it must forever remain entirely unintelligible to those who are not experts.
The economics of the Phillips curve: Formation of inflation expectations versus incorporation of inflation expectations. The interest rate equilibrates the demand and supply of liquidity i. A month later, Keynes, as chief editor of the Economic Journal published a nasty review of Hayek's Prices and Production written by one of Keynes's more uncomprehending and rabid disciples, Piero Sraffa.