Milton Friedman Quantity Theory Of Money. For example if the amount of money in an economy doubles qtm predicts that price levels will also double. In monetary economics the quantity theory of money states that the general price level of goods and services is directly proportional to the amount of money in circulation or money supply.
Due to the actions of the monetary authorities the supply of money changes whereas the demand for money remains more or less stable. In friedman s modern quantity theory of money the supply of money is independent of demand for money. The theory was originally formulated by polish mathematician nicolaus copernicus in 1517 and was influentially restated by philosophers john locke david hume jean bodin and by economists milton fri.
The theory was originally formulated by polish mathematician nicolaus copernicus in 1517 and was influentially restated by philosophers john locke david hume jean bodin and by economists milton fri.
In friedman s restatement of the quantity theory of money the supply of money is independent of the demand for money. The supply of money is unstable due to the actions of monetary authorities. In monetary economics the quantity theory of money states that the general price level of goods and services is directly proportional to the amount of money in circulation or money supply. Due to the actions of the monetary authorities the supply of money changes whereas the demand for money remains more or less stable.
