Talk:Quantity theory of money

message: I've restructured the article significantly.  I am still not comfortable with it in-so-far as it presents a Friedmanite theory as the modern quantity theory, and in-so-far as the “Principles” subsection over-simplifies even that Friedmanite take.  Also, I have not really gone over the criticism section, to ensure that it is logically well-grouped.  Glancing at it, it seems to be padded by inefficiencies. —SlamDiego 16:31, 19 February 2007 (UTC)
thread_title:  Restructuring 

message: :P=\frac{M\cdot V}{Q}
:If V and Q were constant, then:
:\Delta P= \Delta M\,
Can this be correct? If it is, can it be better explained? As calculus, it's not true. It would be true if dP and dM were expressed as percentages ie dP/P = dM/M. I'll add a note or make a change if no one disagrees. 
JBel 22:53, 8 April 2007 (UTC)
replies: text: Good catch! —SlamDiego 04:15, 11 April 2007 (UTC)
thread_title:  a rudimentary theory 

message: Recent unsigned Edit moved to below as per Wikipedia:Talk page guidelines#Layout. --Thomasmeeks 19:47, 26 August 2007 (UTC)
thread_title:  Objections 

message: There are no citations at all, and the entire section needs to be written.  —Preceding unsigned comment added by 67.189.176.236 (talk) 16:26, 13 February 2008 (UTC)
replies: text: Yup. —SlamDiego←T 16:36, 13 February 2008 (UTC)

text: Since there has been a little confusion, let me make it clear that I didn't write that section.  A long time ago, I did a little clean-up on it, then someone else came along and made it truly awful.  The other people have done more clean-up.  But mostly people seem to do as I — stare, go “Bleh!”, and then depart. —SlamDiego←T 17:09, 13 February 2008 (UTC)
thread_title:  Criticism Section 

message: I have moved the discussion with and about Panache to Talk:Quantity theory of money/Archive 1. (I thought about deleting it altogether, as it can be found in the history of this page.  But I figured that, if I did so, then the discussion would surely be resurrected.) —SlamDiego←T 06:30, 23 July 2008 (UTC)
thread_title:  [[Talk:Quantity theory of money/Archive 1|Archive Panache]] 

message: I keep finding rot like this  insinuated into the article.  In point of fact, since there is a ratio between any two quantities (including the number of hairs on George Bush's head and the Dow Jones Industrial average) the equations would all be vacuous tautologies if V were constructed to make the two sides equal.
Economists were discussing monetary velocity before “the price level” was more than an incoherent gleam in anyone's eye.  V is the frequency with which, on average, a unit of money is used to make a purchase.
In a small, simple economy, V is independently observable, without knowing prices or quantities.  One could simply watch each quantity of currency, see how often it changed hands, query whether the transfer involved a purchase (without asking how much was purchased or at what price) and then average the frequency with which a unit of money changed hands.  In a modern economy, such tracking is no longer practical, but that doesn't mean that the velocity has somehow become unreal or constructed as a ratio of \left(P\cdot T\right)/M.
V is logically and mathematically (though not definitionally) equal to \left(\mathbf{p}^\mathrm{T}\cdot\mathbf{q}\right)/M because each turn-over of the monetary unit in the act of purchasing involves exchanging a sum of monetary equal to the quantity purchased times the unit price of the good or service.
V is approximated by — not constructed as — \left(P\cdot T\right)/M, based on the notion that \mathbf{p}^\mathrm{T}\cdot\mathbf{q} may be approximated by P\cdot T.  The equation of exchange stands or falls based upon that approximation, not upon some alleged construction of V. —SlamDiego←T 18:05, 23 February 2009 (UTC)
thread_title:  <math>V</math> 

message: :M\cdot V=P\cdot T
So
:V=\frac{P\cdot T}{M}
So if M increases, and P\cdot T remain unchanged, what happens?  V decreases.  That's just basic algebra.  If you've found a source that claims that an increase in M must mean an increase in P or in T or in both.  Then you've found a source that is sloppy or mathematically ignorant or both.  Stop putting nonsense in the lede.
Also stop putting material that wouldn't belong in the lede that isn't proper to a lede even where it's not incorrect.
And stop treating Keynesianism as a single school with a unified position on quantity theories.  There are certainly critics of the quantity theory, but this article is better with no “Criticism” section than with a cartoon version. —SlamDiego←T 05:55, 28 May 2009 (UTC)
thread_title:  Okay now, for pushy amateurs: 

message: This edit entails a significant theoretical mistake.
One can subscribe to the equation of exchange without accepting the quantity theory; the equation of exchange does not affirm that velocity is stable nor even that it is exogenous.  Opponents of the quantity theory who accept the classical dichotomy are simply committed to the proposition that V or Q will rise to offset an increase in M.  The edit apparently soguht to convey a sense that V or Q were relatively constant with overscores, but that notation is not transparent, and does not in any case address the next point:
Some proponents of the quantity theory do no accept the classic dichotomy; they do not accept that a price level and real values of transactions can be disentangled one from another.
Hence, I have removed that part of the lede that confused the equation of exhange with the quantity theory.
I am further concerned about the remaining effect of the edit.  It seems to classify and caricature pre-Keynesian economics as did Keynes.  The term “classical” might be best avoided altogether, and certainly shouldn't be used as Keynesians peculiarly used it (just as it should not be used as Marxists peculiarly used it); and there was much division over the quantity theory in the pre-Keynesian era. —SlamDiego←T 23:37, 8 October 2009 (UTC)
replies: text: I have removed the reference to “classical” economics, but done nothing more to the passage beyond tightening-up the wording a bit. —SlamDiego←T 03:38, 14 October 2009 (UTC)
thread_title:  Equation of exchange ''v.'' quantity theory 

message: Unless it's explained how the Cambridge version of the equation of exchange was used to criticize the quantity theory, I think that a section on it is misplaced in this article.  Meanwhile, I think that a discussion of the Cambridge version should be in the article on the equation, so I am going to clone it there. (I won't remove it from this article before there's been some opportunity for discussion.) —SlamDiego←T 06:18, 25 November 2009 (UTC)
replies: text: I was working from one reference on this that referred to the Cambridge equation as its own brand of the quantity theory, not just the equation of exchange.  I'll try to find some more sources and clarify that issue and make the importance of the Cambridge equation a little clearer.  Thanks for cleaning up my equations.--Bkwillwm (talk) 13:23, 25 November 2009 (UTC)
replies: text: I think the Cambridge approach to quantity theory probably deserves its own article.  From what I've scrapped together, most people seem to view the Cambridge approach as an alternative quantity theory of money.  I think the best thing to do would be to give the Cambridge its own article.  It deserves some mention on this page, but, hopefully, there's enough material to warrant an article and this article shouldn't devout too much space to Cambridge.  I'm going to start Cambridge cash-balance theory.  "Cambridge equation" apparently can also refer to a Post-Keynesian growth theory, so I think an alternative title would useful and the New School's Economic history site uses this term. I'll get this article going and we can keep some of the most relevant articles here.--Bkwillwm (talk) 00:11, 26 November 2009 (UTC)
replies: text: Well, it would probably be good to have a separate article.  As for this article, I think that it could use a discussion of the Cambridge approach (though briefer than that which would be in any separate article), but that it should be as part of an explanation of a criticism, and in the criticism section. —SlamDiego←T 12:27, 26 November 2009 (UTC)
thread_title:  Cambridge version of equation of exchange 

message: I think that's putting it too strongly. IIRC the main dispute is that according to Keynesians it's broadly true, but that the relation between money supply and prices isn't so simple or direct because it must operate through a market mechanism, which involves the labour market, consumer spending power and other factors. I wouldn't claim to be an expert though.  — Preceding unsigned comment added by 80.114.146.117 (talk) 21:04, 9 July 2016 (UTC)
thread_title:  ‘The theory was challenged by Keynesian economics’ 

message: The section titled evidence provides nothing but Friedman's general claims. This hardly qualifies as evidence in the scientific method sense - as something that can be used to disprove an idea. 
In fact, probably the best evidence I can think of is Volker's experience in the late 1970s and early 1980s at the Fed. Under Friedman's influence, they initially targeted money supply, at least as best as they could. It didn't have an impact. So they switched to interest rates, which did. While the details are interesting, the broad results were clear evidence, and showed that in a very major case monetary theory was disconfirmed. This matters more than assumption-driven equations.
In general, economics gets away with weak definitions of evidence, and the quantity theory of money is a good example. Friedman's work is riddled with cherry picked examples, poor quality data, and other fact problems. Monetarism is saddled with true-believers, the worst circumstance for science. Inflation has winners and losers, and monetarists fought for those who stood to lose - lenders. They fixated on money supply because it appears in hyperinflation. But an extreme case is poor evidence for complex reality.   — Preceding unsigned comment added by 208.80.117.214 (talk) 08:59, 3 May 2017 (UTC)
thread_title:  Evidence? 

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thread_title:  External links modified 

message: An editor has asked for a discussion to address the redirect Quantity equation. Please participate in the redirect discussion if you wish to do so.  signed, Rosguill talk 22:11, 13 November 2019 (UTC)
thread_title:  "Quantity equation" listed at [[Wikipedia:Redirects for discussion|Redirects for discussion]] 

message: This isn't correct:
"In mainstream macroeconomic theory, changes in the money supply play no role in determining the inflation rate as it is measured by the CPI." 2601:152:301:443E:A092:1608:952D:AA3B (talk) 00:07, 27 May 2022 (UTC)
thread_title:  This money supply comment 

message: The page for Martín de Azpilcueta states that he independently discovered QTM. I would not be surprised if several mathematicians independently reached similar conclusions about economics during the renaissance, so a rewording of the introduction on this page may be in order. That being said, the citation for this claim on Azpilcueta’s page is not digital, and so I cannot vet it. 
Does anyone have any good sources they can link in? Azpilcueta seems to be comparatively obscure, especially relative to a name like Copernicus who's contributions to science have had incredibly dramatic effect. His own page needs a good deal of citation and general research. However, I would like some general help clearing this up for the sake of this article. I have memories of reading this page a few years ago and Copernicus was not mentioned. HistorianFromSyracuse (talk) 05:15, 31 January 2023 (UTC)
thread_title:  Theologian and Economist Martín de Azpilcuet 

message: 350px|thumbnail|right|In accordance to "credit mechanics" bank money expansion or destruction (or not changing) depends on payment flows.Frank Decker, Charles A.E. Goodhart (2021): Wilhelm Lautenbach’s credit mechanics – a precursor to the current money supply debate, Taylor & Francis, p. 8, DOI: 10.1080/09672567.2021.1963796.
Maybe that table beside could be interesting to notice within sequence "criticism" - feel free to put it in. Thx! CGB 62.240.134.35 (talk) 13:43, 4 April 2023 (UTC)
thread_title:  Maybe to sequence Criticism