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...

Several explanations have been put forward for the observation that massive inflation has not appeared as a result of the explosive monetary growth generated by quantitative easing that was in 2008. Several plausible explanations have been put forward for this observation, but none of them can...

The paper examines the relationship between money and prices in Japan based on Fisher’s (1911) transactions version of the quantity theory of money. Money is defined as aggregate debt less net foreign assets. A general price index is constructed from consumer prices, real estate prices, stock...

This study re-assesses the validity of the quantity theory of money (QTM) for the very long sample, 1870 to 2020, for 18 industrial countries using the dataset from Jordà et al. (2017). It considers structural changes in the economic and financial sectors and changes in monetary policy...

The paper states that there is a need to go beyond our usual understanding of money e.g. physically, electronically or virtually expressed in term of monetary units like dollar, pounds, gold coins, bitcoins etc. Rather money is best conceptualised as the ability of a person to obtain goods and...

Purpose: The purpose of this study is to test the validity of the quantity theory of money (QTM) on South African sectoral data. The rationale of this study and its necessity for South Africa as the case study is that, although aggregate inflation may lie within the target range, inflation at a...

Many policymakers and economists are surprised by the recent high and persistent inflation. This naturally raises questions about what caused it and why it was so unexpected. This paper argues that the quantity theory of money provides a useful framework for forecasting inflation. Anyone...

During the late-1940s and the early-1950s Milton Friedman favored a rule under which fiscal policy would be used to generate changes in the money supply with the aim of stabilizing output at full employment. He believed that the economy is inherently unstable because of endogenous movements in...

The recent experience of high and persistent inflation caught many policymakers and economists by surprise. This naturally raises questions about what caused inflation and why it was so unexpected. In this paper, I argue that the Quantity Theory of Money provides a useful framework for...

The U.S. national debt is now near 100 percent of GDP and is expected to double that by 2050, according to the Congressional Budget Office. This change in U.S. public finance has some observers worried that a regime of fiscal dominance may soon emerge, making monetary policy subservient to...

This study revisits the Quantity Theory of Money for Greece from the perspective of potentially nonlinear relations between the variables of the equation of exchange. Therefore, this methodological approach makes this study different from previous empirical studies, which were constructed on the...

The quantity equation is a well-established, theoretic, long-run concept that has been criticized for a variety of reasons, i.e., that no precise statements about causality or dynamics between money growth and inflation can be inferred from its components. These shortcomings can be tackled by...

1. Introduction -- Part I: History of Economic Thought: Which are the Issues -- 2. Is History of Economic Thought a "Serious" Subject -- 3. A Slender Trunk and Many Branches: The History of Economic Thought in Perspective, Past and Future -- 4. A Methodological Agenda for New Economic Thinking...

Is inflation a monetary phenomenon? In the decades since the influential work of Milton Friedman, the great moderation has seemingly put to bed the idea that monetary aggregates serve as a useful tool for policy makers. While many point to a structural change in the underlying relationship...

We consider price level determination from the perspective of portfolio choice. Arbitrages among money balances, bonds, and investment goods determine their relative demands. Returns to real balance holdings (transactions services), the nominal interest rate, and after-tax returns to investment...

The Covid-19 crisis has revived an old heated debate on whether significant increases in the money supply -such as the ones accompanying central banks' unconventional policies- ultimately lead to higher inflation. Some observers have alluded to the quantity theory of money for that purpose,...

The purported failure of the classical quantity theory of money in the colonial economy is shown to be a failure of data and not a failure of theory. When new data on the quantity of specie in circulation is added to the current data on paper money and prices, and econometrically estimated in...

How did the Spanish money supply evolve in the aftermath of the discovery of large amounts of precious metals in Spanish America? We synthesize the available data on the mining of precious metals and their international flow to estimate the money supply for Spain from 1492 to 1810. Our estimate...

The Bolivian inflation process is analyzed utilizing a time-varying univariate and multivariate Markov-switching model (TMS). With monthly data and, beginning in the late 1930s, inflation is accurately described by a univariate TMS. The intercept for the high-inflation regime is significantly...

This article investigates the post-1990 link between broad money growth and inflation in 16 full-fledged inflation-targeting regimes and four benchmark non-inflation-targeting regimes. This study employs the Christiano-Fitzgerald band-pass filter and continuous wavelet transform to analyze the...

This study approaches the Quantity Theory of Money at a conceptual level, asking how it can be most reasonably interpreted and quantitatively assessed. The resulting approach is straightforward. Unlike studies relying on other methods we find evidence of its linchpin prediction that is not...

Over the last two centuries, the coherence between either narrow or broad money growth and inflation at zero has exhibited little variation-being, most of the time, close to one-in the US, the UK, and several other countries, thus implying that the fraction of inflation's long-run variation...

The paper analyses the short-run impact of periods of strong monetary growth on inflation dynamics for 15 industrialised economies. We find that when robust money growth is accompanied by large increases in stock and house prices and loose credit conditions, the probability of recording an...

The joint hypothesis test is a replicable interpretation of the quantity theory of money (QTM) when used as an inflation theory. This study examined the effect of money supply and gross domestic product (GDP) growth on inflation volatility. We used the cross- country data of 40 countries, both...

"An essential origin story of modern society's most influential economic doctrine. The Chicago School of economic thought has been widely generalized-and caricaturized-in contemporary debate. What is often portrayed as a monolithic obsession with markets is, in fact, a nuanced set of economic...

The quantity theory of money remains a cornerstone of modern macroeconomics that provides a benchmark for the long-run behaviour of macroeconomic models. The direct empirical evidence for it is, however, less conclusive than suggested by scatterplots and the exaggerated correlations between...

We address the determination of bitcoin prices and decentralized security. Users forecast the transactional and resale value of holdings, pricing the risk of malicious systemic attacks. Miners contribute resources to protect against attackers, competing for block rewards. Bitcoin's design leads...

British monetary experience in the nineteenth century was extremely rich both in terms of the development of the quantity theory and in terms of the evolution of views of the role of the Bank of England in the international gold standard. One can ask, should or could the early Federal Reserve...

This article addresses the low inflation rates of recent years in the light of expansionary monetary policy. Building on essential macroeconomic relationships we present a modern version of the quantity theory of money. At low rates of inflation, an expansionary monetary policy can induce an...