which liquidity preference was actually a response. Because liquidity is effectively the ease at which assets can be converted into currency, liquidity can be considered a more complex term for the amount of time committed in order to convert an asset. Thus, in some ways, it is extremely similar to time preference. Criticisms In Man, Economy, and State (1962), Murray Rothbard argues that the liquidity preference theory of interest suffers from a fallacy of mutual determination. Keynes alleges that the rate of interest is determined by liquidity preference. In practice, however, Keynes treats the rate of interest as determining liquidity preference. Rothbard states "The Keynesians therefore treat the rate of interest, not as they believe they do—as determined by liquidity preference—but rather as some sort of mysterious and unexplained force imposing itself on the other elements of the economic system." Criticism emanates also from post-Keynesian economists, such as circuitist Alain Parguez, professor of economics, University of Besançon, who "reject[s] the keynesian liquidity preference theory ... but only because it lacks sensible empirical foundations in a true monetary economy". See also Diamond–Dybvig model Liquidity premium Liquidity trap Money demand Money market Money supply Time preference Citations References Gauti B. Eggertsson (2008). "liquidity trap," The New Palgrave Dictionary of Economics, 2nd Edition. Liquidity Preference Curve Demand for money Keynesian economics Monetary policy Monetary economics