“Liquidity preference” is a term that was coined by John Maynard Keynes in The General Theory of Employment, Interest and Money to denote the functional relation between the quantity of money demanded and the variables determining it (1936, p. 166), more narrowly the relation between the quantity of money demanded and the rate of interest.
Even Keynes’ liquidity preference theory is not free from criticisms. Please share a sound critique to the theory.
