Prevailing trade theory is a neglected stepchild of economics. Micro rejects the sole reason for trade’s occurrence. It … declares zero profit in equilibrium. Monetary theory and macroeconomics dismiss concerns of trade financing. They assert that … money has nothing to do with traded output, but everything to do with storing value. But now a new trade theory takes over …

) monetary theory, which claims that equality of demand and supply is necessary but not sufficient to clear the market. In … indirect trade, money also must be used. Micro says that price is equal to marginal cost, rejecting trade theory’s claim that … trade is gainful. To remove these and other contradictions, price theory must be repaired. Money’s role in market clearing …

This paper revisits Keynes’s liquidity preference theory as it evolved from the Treatise on Money to The General Theory … and after, with a view of assessing the theory’s ongoing relevance and applicability to issues of both monetary theory and … policy. Contrary to the neoclassical “special case” interpretation, Keynes considered his liquidity preference theory of …

degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary … measure of the (lack of) credibility of the monetary policy authority, we investigate the welfare effect of a marginal … increase in credibility. Our main finding is that, in a simple model of the monetary transmission mechanism, most of the gains …