Liquidity preference, capital accumulation and investment financing: Fernando Carvalho’s contributions to the Post-Keynesian paradigm

By José Luis Oreiro, Luiz Fernando de Paula, João Pedro Heringer Machado

PKES Working Paper 2007

February 2020

This paper assesses the main theoretical contributions by Fernando Cardim de Carvalho to the Post-Keynesian Economics Paradigm: his elucidation of the fundamental principles that define the concept of a monetary production economy; his analysis of decision-making under non-probabilistic uncertainty; his development of a portfolio choice theory in which the decision to invest is regarded as one of possible wealth accumulation strategies; his liquidity preference theory, including its application to banks’ portfolio allocations under uncertainty; and finally his analysis of the finance-funding circuit and its implications for the functioning of monetary economies.

Keywords: Post-Keynesian theory; Keynes; monetary economics

JEL classification: B59 E12 E44