The aim of the present study is to analyze empirically the significance of the monetarist explanation of inflation in Pakistan. After testing the data for stationarity, the method of least squares is used. Regression analysis shows slight effects of money supply on inflation while, by contrast,...

The Quantity Theory of Money claims to provide one of the few long-run guides to economic policy by providing specific numbers to characterise the correlation between money growth and inflation. Acceptance of the Quantity Theory has been greatly helped by the claim, propounded most effectively...