In monetary economics , the quantity theory of money QTM states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply. The theory was challenged by Keynesian economics , [4] but updated and reinvigorated by the monetarist school of economics. Critics of the theory argue that money velocity is not stable and, in the short-run, prices are sticky , so the direct relationship between money supply and price level does not hold. In mainstream macroeconomic theory, changes in the money supply play no role in determining the inflation rate. In such models, inflation is determined by the monetary policy reaction function.

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To browse Academia. Skip to main content. By using our site, you agree to our collection of information through the use of cookies. To learn more, view our Privacy Policy. Log In Sign Up. Papers People. Our interpretation challenges Friedman and Schwartz's assumption that Fisher includes deposits in his definition of money and would then consider necessary a credit control policy.

In our opinion, it is not the nature of bank credit that changes for Fisher, but its role in triggering and spreading crises. Save to Library. Valor y dinero en Marx. This dissertation discusses the role of money and finance in transforming society towards social, ecological and economic sustainability. During the s the money markets and foreign exchange markets have been liberalized, During the s the money markets and foreign exchange markets have been liberalized, deregulated and internationalized, and the social control of cash flows has become seriously weakened.

In line with this development, banks are expected to act as profit-maximizing businesses, while they were previously expected to function as social institutions. Contrary to this development, in many countries a variety of small organizations have emerged, that run banks and financing activities on the basis of social, environmental and ethical values.

Some see their business as part of changing the economic system. Although these organizations are few in each country, and small compared to traditional banks, they have had a strong growth, both in number and size during the last decade.

They represent a development towards directing cash flows to projects that point in the direction of an alternative development, putting money to social and ethical use as part of transforming society towards sustainability and justice.

However, the future importance of this trend is dependent on the further development of these organizations. Financing activities are conducted in a market where actors are obliged to fulfill certain requirements for profitable and rational operations, and to avoid losses. Furthermore, financial institutions must comply with regulatory requirements.

Here, the central question is how the alternative financial institutions maintain their ideal goals, ideology and practice while surviving as market players and adapting to the regulatory framework. The dissertation discusses these challenges using three case studies employing theories of the role of money in society, as well as theory of social movements and new institutional theories. The study concludes that alternative financial institutions represent real alternatives to market-based, profit-maximizing financial organizations: Firstly they contribute to alternative theoretical and ideological understandings of the relationship between money, economy and society, drawing on lines of thought which can be traced back to Aristotle, to the scolastics of the Middle Ages and to the major religions, within which money, profit and economic activity have been subject to social and ethical considerations.

Secondly, the alternative financial institutions create new models for an ethical and sustainable development by creating funding systems based on the consideration of the community, the environment, society or marginalized groups in the loan market, in this case women. Finally, alternative financial institutions create opportunities to initiate experiments and projects that would otherwise not have begun, thus anchoring alternative development paths in real-world examples, such as wind power, organic farming, and local small scale projects.

Real interest rates, as commonly measured and interpreted as the difference between a market interest rate and consumer price inflation do not represent an executable arbitrage.

They should be measured using inflation measures for They should be measured using inflation measures for tangible, storable real assets. The case of Japan is used to illustrate the point. La monnaie, a-t-on souvent soutenu, constitue le meilleur support pour la propagande des princes. Economic crises have always been a challenge to the modern capitalism and over time economists have put forth differing theoretical explanations for their causes. While most mainstream economists hold that the times during which economic While most mainstream economists hold that the times during which economic growth decreases rapidly are caused by various external shocks to the economy, other non-mainstream economists hold that the causes are built in the very system and as such can be anticipated.

This dissertation provides a critical reflection on the economic busts ideas put forth by a non-mainstream economist, Hyman Minsky, who followed the post-Keynesian school of economics. The dissertation will also discuss how the ideas and traditions of authors in the history of economic thought, namely Irving Fisher, Joseph Schumpeter and John M. Keynes, collectively influenced Minsky and consequently, his FIH. At the macroeconomic level, however, the ideas are missing some key components of the Keynesian approach and are therefore not applicable.

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Irving Fisher



Quantity theory of money




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