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 [...]
There are similarities and dissimilarities between the two approaches of the quantity theory of money, i.e, the Fisherian transaction approach and the Cambridge cash-balance approach. Similarities between the Two Approaches: The similarities between the Fisherian and the Cambridge approaches are discussed below: 1. Similar Equations: Robertson's cash-balance equation, P = M/KT is quite similar to that given by Fisher; P [...]
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; [...]