Abstract: While in Hicks's analysis there is the idea of a yield curve normally upward sloping, Keynes does not appear to envisage a systematic positive spread between long-term and short-term interest rates. This is mainly due a difference in their notions of liquidity, and in particular to Keynes's disbelief in the possibility of quantifying the premium required to induce investors to hold long-term rather than short-term assets. It follows that Hicks's and Keynes's explanations of the term structure are neither identical nor can be assimilated to the notion of ‘preferred habitat’, as suggested in some literature.

A note on the notions of risk-premium and liquidity-premium in Hicks's and Keynes's analyses of the term structure of interest rates / Luca, Fantacci; Marcuzzo, Maria Cristina; Eleonora, Sanfilippo. - In: EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT. - ISSN 0967-2567. - STAMPA. - 21:6(2014), pp. 1102-1108. [10.1080/09672567.2014.972637]

A note on the notions of risk-premium and liquidity-premium in Hicks's and Keynes's analyses of the term structure of interest rates

MARCUZZO, Maria Cristina;
2014

Abstract

Abstract: While in Hicks's analysis there is the idea of a yield curve normally upward sloping, Keynes does not appear to envisage a systematic positive spread between long-term and short-term interest rates. This is mainly due a difference in their notions of liquidity, and in particular to Keynes's disbelief in the possibility of quantifying the premium required to induce investors to hold long-term rather than short-term assets. It follows that Hicks's and Keynes's explanations of the term structure are neither identical nor can be assimilated to the notion of ‘preferred habitat’, as suggested in some literature.
hicks; keynes; long-term and short-term interest rates; risk-premium and liquidity-premium
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A note on the notions of risk-premium and liquidity-premium in Hicks's and Keynes's analyses of the term structure of interest rates / Luca, Fantacci; Marcuzzo, Maria Cristina; Eleonora, Sanfilippo. - In: EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT. - ISSN 0967-2567. - STAMPA. - 21:6(2014), pp. 1102-1108. [10.1080/09672567.2014.972637]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/654220
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