Quantity Theory of MoneyB.V. Gopinath
Macroeconomics from EconWPA Abstract: Quantity Theory is a foolproof theory. This Theory is based on Law of Conservation of Wealth. This Theory tests positive with Law of Mass Action of reversible economic (chemical) reactions. Study of utility ( I call utility as all that a human being needs) helps us understand Quantity Theory better. Utility and water have similarities. Water is a form of matter and utility is a form of wealth. Water is universal solvent and so is utility. All other forms of wealth dissolve in utility. Water is in the form of H + OH. Similarly utility exists in the form of Goods and services which are otherwise called as WANTS by economists + money and money related forms of wealth that are called as MEANS by economists. According to Law of Law of Conservation, value of wants = value of means. Any economic entity, be it an individual, a family, a society, a business firm, a state or a nation tries to attain equilibrium between wants and means. Quantity Theory is relevant to all branches of Economics. Keywords: Law of Conservation of Wealth; Utility; Law of Mass Action of reversible chemical reactions; Economic reactions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0504003 Access Statistics for this paper More papers in Macroeconomics from EconWPA |
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