Keynes on the control of the money supply and the interest rates

The paper examines the evolution of Keynes' position on the ability of the monetary authorities to control the money supply and the interest rates. It contradicts the view, which prevails in the literature, that Keynes considered the supply of money as an exogenous variable in his analysis, showing instead that Keynes' position is akin to the view, which is dominant at present, that the monetary authorities prefer stabilise the interest rate, rather than the money supply, in order to control expenditure and the economy. The paper follows the evolution of Keynes' position from the Tract on Monetary Reform (1923) to its late writings in the 1940s.