The Quantity Theory of Money

David Howden

MPRA Paper from University Library of Munich, Germany

Abstract: For an innocuous statement based on a trivial tautology, the quantity theory of money is sorely battered. This paper has three goals. First, it exposes the various flavours of the quantity theory as special cases of a simple application of the law of diminishing marginal utility. Second, it provides an overview of some typically controversial aspects of the quantity theory. Finally, it reformulates the quantity theory in light of these now resolved controversies. Although I use the term “quantity theory of money”, by the end of this article I reformulate the concept as an “exchange theory of velocity”.

Keywords: quantity theory of money; velocity; equation of exchange; inflation (search for similar items in EconPapers)
JEL-codes: E3 E30 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

Published in Journal of Prices & Markets 1.1(2013): pp. 17-30

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79601

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