Equations for quantity theory of money by different economists! 1. The Cambridge Equation: The Cambridge economists explained their cash-balance approach to the quantity theory of money by formulating equations known as Cambridge equations. The Marshallian cash-balance equation is expressed as follows: M = KPY where, M is the quantity of money (currency plus demand deposits); P is the price level; [...]
In this article we will discuss about the quantity theory of money by Cambridge, Keynes and Friedman, along with its criticisms. 1. Cambridge Cash-Balance Approach: During almost the same period when Fisher was developing his equation of exchange in America, Marshall, Pigou, Robertson, Keynes, etc. at the Cambridge University popularised the classical Cambridge cash-balance approach to the quantity theory of [...]
In this article we will discuss about:- 1. Fisher's Equation of Exchange 2. Assumptions of Fisher's Quantity Theory 3. Conclusions 4. Criticisms 5. Merits 6. Implications 7. Examples. Fisher's Equation of Exchange: The transactions version of the quantity theory of money was provided by the American economist Irving Fisher in his book- The Purchasing Power of Money (1911). According to [...]