The possibility of obtaining a "theory" of money is questioned, where a theory is taken to mean an explanatory framework using a small number of observables. The root of the problem lies in the maximizing nature of economic agents. Money is means to effect transactions and savings; what will be...

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...