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quantity theory

   Also found in: Financial 0.01 sec.
quantity theory
n
(Economics) Economics a theory stating that the general price level varies directly with the quantity of money in circulation and the velocity with which it is circulated, and inversely with the volume of production expressed by the total number of money transactions


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Specifically, they discuss positive economics, flexible exchange rates, the quantity theory of money, the business cycle, monetary policy, econometric policy evaluation, asset prices, the mechanics of economic development, the labor-market equilibrium, and other topics.
As predicted by the textbook quantity theory of money, this practice has devalued the Zimbabwean dollar and caused hyperinflation.
To detect the quantity theory of money, Sargent and Surico look at scatter plots of filtered time series of inflation and money growth rates and interest rates and money growth rates.
 
 
 
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