The 'classical' monetary theories of Marshall, Wicksell, and Keynes and the General Theory's critique: Equilibrium, price trends, and cycles

We first demonstrate the importance of the doctrines of the quantity theory and the long-period stationary state in the formulation of Marshall's, Wicksell's, and Keynes' pre-General Theory monetary theories. We analyze the anomalous events characterized by these writers as short-period phenomena. From the perspective built up around the quantity equation and its long-period context, business cycles represent economic convolutions in which the behavioral mechanisms of the long-period break down. We demonstrate the theoretical breakdown; importantly, it is not reflected in the work of these writers that they understood that their explanations of short-period events undermined the long-period theorizing they carefully built. Second, it is argued that Keynes saw the General Theory as a theory of the short-period in contrast to the long-period monetary frameworks. We use the General Theory's criticisms of classical monetary theory to establish this point.