The role of the gold standard in Keynesian monetary theory

This paper shows that many of the most distinctive features of Keynesian economics are best understood if one views the General Theory as essentially a gold standard model. A close examination of Keynes's statements on contemporaneous policy issues suggests that the gold standard had a profound impact on his views on monetary policy effectiveness. In particular I shots that the liquidity trap has been widely misunderstood. Finally, I argue that post-General Theory developments in Keynesian economics are best understood as a response to the inapplicability of Keynes's original message to a world of fiat money regimes. (JEL B22, E12, N1).