Keynes's theory of liquidity preference and his debt management and monetary policies

This paper seeks to bolster the view that Keynes was a monetary economist concerned primarily with monetary and not fiscal policy. His most fundamental policy conclusion for national economies was that the authorities could control the long-term rate of interest and should do so to promote investment, growth and employment. Keynes's theory of liquidity preference is presented as a theory of money as a store of value that leads to this fundamental policy conclusion. The theory is then applied to explain the debt management, monetary and international financial policies that were adopted in World War II.