In economics, the premium that holders of wealth demand for exchanging ready money or bank deposits for safe, nonliquid assets such as government bonds .
As first used by John Maynard Keynes , liquidity preference referred to the demand for money as an asset. He hypothesized that the amount of money held for this purpose would vary inversely with the rate of interest . Post-Keynesian analysis of liquidity preference has identified other factors that influence the demand for money, including income levels and the yields of various forms of wealth.