An actuarial theoretical setting is presented to characterise the money demand and the monetary equilibrium. Two main hypotheses are stated that contradict assumptions normally sustained in empirical investigations of the money demand: national output is assumed to be a random variable, and...

An alternative theoretical setting is presented to characterise the money demand and the monetary equilibrium. Two main hypotheses are stated that contradict the assumptions normally sustained by scholars and policy-makers: National output is assumed to be a random variable, and people are...

A general theory of liquidity is proposed. The major hypothesis advanced in the paper is that individuals do face borrowing restrictions in capital markets. The value of portfolios combining risky assets and cash balances is then related to the price assigned in some market of deposit insurance,...