An appreciation of Chapter 17 of Keynes's General Theory

This link is to a draft I have had a bit of time to work on recently. Obviously it is uncertainty that creates the need for liquid stores of value, a place to store one's wealth that can be drawn on whatever the reason. In chapter 17 Keynes argued that what makes a store value liquid is, in part, its low price elasticity of demand (i.e. its "low elasticity of substitution"). What I argue is that (1) this implies a low price elasticity of demand for money which (2) in turn makes the aggregate demand curve relatively price inelastic. In doing this, I draw a more direct link between the argument Keynes presents in chapter 17 of the General Theory (on the essential properties of interest and money) and chapter 19 (on the efficacy of wage cuts) than I believe has been made before. A relatively price inelastic aggregate demand curve implies that the real balance effect WILL BE relatively speaking weak. And, the weaker the real balance effect is, the more difficult it is for wage cuts to return an economy to full employment once pushed below this point by a negative demand shock.