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- Title
TRANSACTIONS DEMAND FOR MONEY AND THE QUANTITY THEORY.
- Authors
Ahmad, Symed
- Abstract
This article deals with a study which explored the consequences of transactions demand for money for the quantity theory. Karl Brunner and Allan Meltzer (henceforth simply B-M) reformulated a result on the transactions demand for money, and then proceeded to use it for re-establishing the validity of the quantity theory of money. B-M start with. Baumol's two expressions for average money holdings: one for the first sub-period and the other for the subsequent sub-periods. We can infer from the discussion so far that, except in the immediately preceding case, the quantity theory does not hold even if we allow all of B-M's assumptions. One consequence of accepting this view would be that in addition to Keynes, Irving Fisher and Pigou would have to be considered opponents of the quantity theory, since they explicitly accept economies of scale in the use of money.
- Subjects
DEMAND for money; LIQUIDITY (Economics); QUANTITY theory of money; MONEY supply; MONEY; ECONOMICS
- Publication
Quarterly Journal of Economics, 1977, Vol 91, Issue 2, p327
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1885420