EXPENDITURE PLANS AND THE UNCERTAINTY MOTIVE FOR HOLDING MONEY.

The article discusses the impact of uncertainty about future interest rates on the demand for money. The Keynesian speculative motive for holding money comes from the expectation that the interest rates on bonds will increase. The author analyzes the conditions affecting the relative riskiness of bonds and cash. Based on the cases that have been considered for the study, an increase in the rate of interest relative to the return available on money would have a substitution effect tending to make the investor hold more bonds.