Entrepreneurship, knowledge and employment

Money as a store of value: J. B. Say on hoarding and idle balances

Numa Guy, University of Massachusetts Boston

The common narrative about Say’s treatment of money holdings is that he denied the possibility of hoarding. I show that this interpretation of Say’s thinking is erroneous. Drawing upon the various editions of Traité and Cours and other lesser-known texts, I provide substantial evidence to refute the widespread but erroneous view that, for Say, money was only a medium of exchange. In reality, not only did Say analyze long-term and short-term hoarding, but more generally, Say did envision that money could serve as a store of value. In particular, two motives can lead individuals to keep idle balances: a precautionary motive, and the expectation of a higher profitability of future investments in times of uncertainty. For Say, hoarding was not a cause but a symptom of political and economic crises.

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Keywords: Say, hoarding, money

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