What is the difference between Keynes’s money demand theory and neoclassical economics’ money demand theory?

The two differ in their economic frameworks, assumptions and policy recommendations.

1. Different economic frameworks: Keynes’s money demand theory is based on Keynesian economics, focusing on macroeconomic analysis of aggregate demand and aggregate supply; neoclassical economics’ money demand theory is based on neoclassical economics , paying more attention to long-term equilibrium and the micro-level of the market.

2. Different assumptions: In Keynes’ money demand theory, money demand is usually regarded as a function, closely related to the relationship between income and interest rates; in the money demand theory of neoclassical economics, money Demand is thought to be determined primarily by interest rates.

3. Policy recommendations are different: based on Keynes’ money demand theory, the government and the central bank can influence the macroeconomy by adjusting the money supply to achieve employment and inflation targets; based on neoclassical economics’ money demand In theory, government intervention is deemed unnecessary and market mechanisms will automatically adjust currency demand and supply.