- 経済学論究 (ISSN:02868032)
- vol.58, no.2, pp.29-62, 2004-09
The purpose of this paper is to review the historical evolution of the Quantity Theory of Money. I argue that one of the central tenets of the Quantity Theory is the neutrality of money which was also the maintained hypothesis of the Classical and Neoclassical Economics. Despite criticisms from Keynes, the Quantity Theory has revived itself in the form of Monetarism since the 1960s which is now the cornerstone of modern macroeconomics. However, Quantity Theory/Monetarism implicitly assumes the exogeneity and controllability of the money supply. These properties are increasingly cast into doubt as the range and magnitude of inside money (bank deposits and similar financial instruments) have substantially expanded.