Andrew Jackson - Where Does Money Come From - Positive Money pdf from epub

* Fisher formulated this approach with the equation of exchange which states that under any given conditions of industry and civilisation, deposits tend to hold a fixed or normal ratio to money in circulation. The equation of exchange is MV = PT, where M is Money (including bank deposits), V is the velocity of money, P is the general price level and T the volume of transactions. This equation eventually gave rise to the ‘Quantity Theory of Money’ which has dominated macro-economics for much of the last century.19