IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/79601.html

The Quantity Theory of Money

Author

Listed:
  • Howden, David

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”.

Suggested Citation

  • Howden, David, 2013. "The Quantity Theory of Money," MPRA Paper 79601, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:79601
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/79601/1/MPRA_paper_79601.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Laidler, David, 1969. "The Definition of Money: Theoretical and Empirical Problems," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(3), pages 508-525, August.
    2. Philipp Bagus & David Howden, 2011. "Monetary equilibrium and price stickiness: Causes, consequences and remedies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 24(4), pages 383-402, December.
    3. Milton Friedman, 1971. "A Theoretical Framework for Monetary Analysis," NBER Books, National Bureau of Economic Research, Inc, number frie71-1, January.
    4. Robinson, Joan, 1970. "Quantity Theories Old and New," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 2(4), pages 504-512, November.
    5. Bagus, Philipp & Howden, David, 2012. "The Continuing Continuum Problem and Future Goods," MPRA Paper 79595, University Library of Munich, Germany.
    6. repec:bla:ecorec:v:67:y:1991:i:199:p:289-306 is not listed on IDEAS
    7. Philipp Bagus & David Howden, 2012. "Monetary equilibrium and price stickiness: A rejoinder," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 25(3), pages 271-277, September.
    8. Glenn M. MacDonald, 1982. "The Size and Structure of Union-Nonunion Wage Differentials in Canadian Industry: Corroboration, Refinement and Extension," University of Western Ontario, Departmental Research Report Series 8218, University of Western Ontario, Department of Economics.
    9. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
    10. Philipp Bagus & David Howden, 2009. "The Legitimacy of Loan Maturity Mismatching: A Risky, but not Fraudulent, Undertaking," Journal of Business Ethics, Springer, vol. 90(3), pages 399-406, December.
    11. Bagus, Philipp & Howden, David, 2013. "Some Ethical Dilemmas with Modern Banking," MPRA Paper 79599, University Library of Munich, Germany.
    12. David Laidler, 1982. "Radcliffe and the Quantity Theory," University of Western Ontario, Departmental Research Report Series 8207, University of Western Ontario, Department of Economics.
    13. Leland B. Yeager, 1994. "Tautologies in Economics and the Natural Sciences," Eastern Economic Journal, Eastern Economic Association, vol. 20(2), pages 157-169, Spring.
    14. Howden, David, 2009. "Fama's Efficient Market Hypothesis and Mises' Evenly Rotating Economy: Comparative Constructs," MPRA Paper 79586, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Howden, David, 2016. "A Refinement to the Typology of “Goods”," MPRA Paper 79799, University Library of Munich, Germany.
    2. Bagus, Philipp & Howden, David, 2016. "Central Bank Balance Sheet Analysis," MPRA Paper 79801, University Library of Munich, Germany.
    3. Pavel Ciaian & d’Artis Kancs & Miroslava Rajcaniova, . "The price of Bitcoin: GARCH evidence from high-frequency data," Journal of Investment Strategies, Journal of Investment Strategies.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philipp Bagus & Amadeus Gabriel & David Howden, 2018. "On the Necessary and Sufficient Conditions for Legitimate Banking Contracts," Journal of Business Ethics, Springer, vol. 147(3), pages 669-678, February.
    2. Philipp Bagus & David Howden & Amadeus Gabriel, 2014. "Causes and Consequences of Inflation," Post-Print hal-02634016, HAL.
    3. Joshua R. Hendrickson, 2015. "Monetary equilibrium," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(1), pages 53-73, March.
    4. David Laidler, 1991. "The Quantity Theory is Always and Everywhere Controversial—Why?," The Economic Record, The Economic Society of Australia, vol. 67(4), pages 289-306, December.
    5. Philipp Bagus & Amadeus Gabriel & David Howden, 2016. "Reassessing the Ethicality of Some Common Financial Practices," Journal of Business Ethics, Springer, vol. 136(3), pages 471-480, July.
    6. Campos Dias de Sousa, Ricardo Emanuel & Howden, David, 2015. "The Efficient Market Conjecture," MPRA Paper 79792, University Library of Munich, Germany.
    7. Edward Nelson, 2004. "Money and the Transmission Mechanism in the Optimizing IS-LM Specification," History of Political Economy, Duke University Press, vol. 36(5), pages 271-304, Supplemen.
    8. Jesús Huerta de Soto & Antonio Sánchez-Bayón & Philipp Bagus, 2021. "Principles of Monetary & Financial Sustainability and Wellbeing in a Post-COVID-19 World: The Crisis and Its Management," Sustainability, MDPI, vol. 13(9), pages 1-11, April.
    9. Edward Nelson, 2019. "Karl Brunner and U.K. Monetary Debate," Finance and Economics Discussion Series 2019-004, Board of Governors of the Federal Reserve System (U.S.).
    10. Goodhart, Charles, 1989. "The Conduct of Monetary Policy," Economic Journal, Royal Economic Society, vol. 99(396), pages 293-346, June.
    11. David Howden & Amadeus Gabriel, 2015. "The Interest Rate Brake on Maturity Transformation," Journal of Economic Issues, Taylor & Francis Journals, vol. 49(4), pages 1100-1111, October.
    12. Philipp Bagus & David Howden, 2012. "Monetary equilibrium and price stickiness: A rejoinder," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 25(3), pages 271-277, September.
    13. Roger W. Garrison, 2004. "A Roundabout Approach to Macroeconomics: Some Autobiographical Reflections," The American Economist, Sage Publications, vol. 48(2), pages 26-40, October.
    14. Bagus, Philipp & Howden, David, 2010. "The Term Structure of Savings, the Yield Curve, and Maturity Mismatching," MPRA Paper 79592, University Library of Munich, Germany.
    15. Bagus, Philipp & Howden, David, 2016. "Central Bank Balance Sheet Analysis," MPRA Paper 79801, University Library of Munich, Germany.
    16. Philipp Bagus & David Howden & Jesús Huerta de Soto Ballester, 2018. "Entrepreneurial Error Does Not Equal Market Failure," Journal of Business Ethics, Springer, vol. 149(2), pages 433-441, May.
    17. Philipp Bagus & David Howden & Amadeus Gabriel, 2017. "The Hubris of Hybrids," Journal of Business Ethics, Springer, vol. 145(2), pages 373-382, October.
    18. Sedlarski, Teodor, 2012. "Монетаристко Развитие На Теорията На Търсенето На Пари [Monetarist development of the money demand theory]," MPRA Paper 56694, University Library of Munich, Germany.
    19. James Forder, 2016. "What was the message of Friedman," Economics Series Working Papers 814, University of Oxford, Department of Economics.
    20. Masudul Hasan Adil & Rafiq Hussain & Adelajda Matuka, 2022. "Interest rate sensitivity of demand for money and effectiveness of monetary policy: fresh evidence from combined cointegration test and ARDL approach," SN Business & Economics, Springer, vol. 2(7), pages 1-24, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:79601. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.