On the indeterminacy of Keynes's monetary theory of value

Abstract

In this article I propose to reconsider Hugh Townshend's contribution in terms of the assessment made by George Shackle that Townshend proved the indeterminacy and nihilism inherent in the General theory. What I shall show, however, is that Townshend did not conclude that asset prices were indeterminate, but rather that they fell within a range of determinacy depending upon the relative magnitude of certain conventional criteria. And whilst it is true that Keynes clearly felt that an econonmy would be unpredictably unstable when these conventions broke down his motivation was to focus on the conditions by which the instiutional and conventional generative mechanisms could explain the relative stability of an economy when the prospective yield of assets were uncertain.

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