The model that follows augments the
quantity theory of money by adding an additional currency to the equation of exchange.
In this theory, the logic of the
quantity theory of money is preserved but "not interpreted as some mechanical relation" (Yeager 2012).
However, it has also been proved that
quantity theory of money is not applicable in Pakistan along with unstable income velocity of money, which casts doubt on the use of monetary aggregates targeting (Omer and Saqib, 2009).
Friedman re-instated the
Quantity Theory of Money, and argued that there was a natural rate of unemployment, which could not be affected by economic policy, in direct opposition to Keynesian insights.
The quality theory of inflation rests on the expectation of a buyer accepting currency to be able to exchange that currency at a later time for goods that are desirable as a buyer, while the
quantity theory of inflation rests on the equation of the money supply, its velocity and exchanges.
This is quite puzzling, both in terms of the traditional
quantity theory of money and in terms of the Taylor ride approach to monetary policy.
In China, Zhang (2013) uses the multivariate dynamic model from the money
quantity theory of Friedman and the Meltzer's monetary model.
This contradicts the famous
Quantity Theory of Money, according to which the amount of money is just a veil, which has no bearing on the real economy.
Having said that, the
quantity theory of Money (MV=PQ) still seems to support a slight economic uptick.
The unreliable Busner has been a fixture of Self's fiction since his first collection of short stories, The
Quantity Theory of Insanity, but in the opening pages of this novel we see him as we have not before.
According to the
quantity theory of money, inflation derives from the excessive supply of money by governments, for example, in order to cover budget deficits.
He describes the
quantity theory of money and says it is fundamental and not subject to question.