[{"data":1,"prerenderedAt":200},["ShallowReactive",2],{"term:quantity-theory-of-money":3},{"term":4,"related":183},{"id":5,"title":6,"body":7,"category":164,"description":165,"extension":166,"faq":167,"meta":168,"navigation":169,"path":170,"related":171,"seo":176,"stem":177,"takeaways":178,"__hash__":182},"terms\u002Fterms\u002Fquantity-theory-of-money.md","Quantity Theory of Money",{"type":8,"value":9,"toc":158},"minimark",[10,15,19,22,26],[11,12,14],"h2",{"id":13},"understanding-quantity-theory-of-money","Understanding Quantity Theory of Money",[16,17,18],"p",{},"The equation of exchange, MV = PY, is an identity. The quantity theory adds the assumption that velocity and real output are fairly stable, so sustained money growth shows up mainly as inflation.",[16,20,21],{},"It describes long-run and high-inflation episodes well, but velocity can swing sharply in the short run.",[11,23,25],{"id":24},"formula","Formula",[27,28,31],"span",{"className":29},[30],"katex-display",[27,32,35,77],{"className":33},[34],"katex",[27,36,39],{"className":37},[38],"katex-mathml",[40,41,44],"math",{"xmlns":42,"display":43},"http:\u002F\u002Fwww.w3.org\u002F1998\u002FMath\u002FMathML","block",[45,46,47,72],"semantics",{},[48,49,50,54,58,61,64,67,69],"mrow",{},[51,52,53],"mi",{},"M",[55,56,57],"mo",{},"×",[51,59,60],{},"V",[55,62,63],{},"=",[51,65,66],{},"P",[55,68,57],{},[51,70,71],{},"Y",[73,74,76],"annotation",{"encoding":75},"application\u002Fx-tex","M \\times V = P \\times Y",[27,78,82,109,130,149],{"className":79,"ariaHidden":81},[80],"katex-html","true",[27,83,86,91,97,102,106],{"className":84},[85],"base",[27,87],{"className":88,"style":90},[89],"strut","height:0.7667em;vertical-align:-0.0833em;",[27,92,53],{"className":93,"style":96},[94,95],"mord","mathnormal","margin-right:0.109em;",[27,98],{"className":99,"style":101},[100],"mspace","margin-right:0.2222em;",[27,103,57],{"className":104},[105],"mbin",[27,107],{"className":108,"style":101},[100],[27,110,112,116,119,123,127],{"className":111},[85],[27,113],{"className":114,"style":115},[89],"height:0.6833em;",[27,117,60],{"className":118,"style":101},[94,95],[27,120],{"className":121,"style":122},[100],"margin-right:0.2778em;",[27,124,63],{"className":125},[126],"mrel",[27,128],{"className":129,"style":122},[100],[27,131,133,136,140,143,146],{"className":132},[85],[27,134],{"className":135,"style":90},[89],[27,137,66],{"className":138,"style":139},[94,95],"margin-right:0.1389em;",[27,141],{"className":142,"style":101},[100],[27,144,57],{"className":145},[105],[27,147],{"className":148,"style":101},[100],[27,150,152,155],{"className":151},[85],[27,153],{"className":154,"style":115},[89],[27,156,71],{"className":157,"style":101},[94,95],{"title":159,"searchDepth":160,"depth":160,"links":161},"",2,[162,163],{"id":13,"depth":160,"text":14},{"id":24,"depth":160,"text":25},"economy","The idea that money supply times its velocity equals the price level times real output.","md",[],{},true,"\u002Fterms\u002Fquantity-theory-of-money",[172,173,174,175],"velocity-of-money","inflation","monetarism","hyperinflation",{"title":6,"description":165},"terms\u002Fquantity-theory-of-money",[179,180,181],"MV = PY links money, velocity, prices and output.","Over long periods, fast money growth means inflation.","Short-run velocity is unstable.","mpVIA09j-sHTkewCp5tzxw5kVlwchg55328uw5Ololc",[184,188,192,196],{"title":185,"description":186,"path":187},"Hyperinflation","Extremely rapid inflation, often defined as prices rising more than 50% a month.","\u002Fterms\u002Fhyperinflation",{"title":189,"description":190,"path":191},"Inflation","The rate at which the general level of prices rises, eroding purchasing power.","\u002Fterms\u002Finflation",{"title":193,"description":194,"path":195},"Monetarism","The school of thought that the money supply is the main driver of inflation and nominal spending.","\u002Fterms\u002Fmonetarism",{"title":197,"description":198,"path":199},"Velocity of Money","How many times a unit of money is spent on final goods and services in a period.","\u002Fterms\u002Fvelocity-of-money",1793374005758]