Keynes and Schumpeter

Keynes and Schumpeter both thought rate of interest to be a monetary phenomena. Differences between them are wide and unbridgeable. But there are also remarkable similarities, which have gone unnoticed and unstudied, between them concerning their views on Ricardian monetary theory, theory of rate of interest, role of imperfect competition and entrepreneurial functions. The major focus of this study is on their theories of rate of interest. The discussion of their theories of interest inevitably involves the discussion of monetary theory in general, role of imperfect competition and the entrepreneurial function. The plan of discussion is as follows. First, the true essence of the classical and neoclassical theory is given. The author fully realizes that there are differences among the classical and neoclassical economists regarding the nature and determination of interest, but there is an accepted body of knowledge that is generally referred to as the neoclassical theory of interest. Second, Schumpeterian and Keynesian theories of interest are stated.
Third, above theories are compared and contrasted from the point of view of the monetary theory, imperfect competition and entrepreneurial function.