Today's shorthand: the number of traditional currencies says
Cash transactions say
Fisher
One, the american economist fisher proposed a famous trade equation in money purchasing power:
Fisher equation: mv = pt
P: price levels; t: trade in goods and services
V: speed of currency movement; m: volume of currency。
2 v and t are not affected by m changes in the long term:
(1) v is determined by institutional factors and is difficult to change in the short term and can be considered a constant
(2) t is largely stable, depending on non-monetary factors such as capital, labour and the availability of natural resources and the level of production technology。
(3) only price level p and currency volume m are directly related。
3. Currency volumes are the most dynamic factor, with frequent and proactive movements, while prices are the main passive factor。
Thus, the equation reflects the theory that monetary volumes determine price levels。
Assuming that other factors remain unchanged, the price level is proportional to the monetary volume。
The cash balance says
(cambridge academy)
1. The main representative of the cambridge school is pagogue. "value of currency" 1917 describes the cambridge equation: πky/m
π: monetary value (i. E. The purchasing power of the currency, which is the last of the price index)
Y: total resources (gross income)
K: share of total resources that are willing to be held in monetary form (equivalent to the penultimate rate of currency circulation in the equation)
M: nominal currency quantity; ky: real currency demand。
Conclusions
(1) according to pago, the value of the currency is determined by the quantitative relationship between the supply of and demand for money。
(2) monetary value is inversely proportional to nominal money supply。
Difference
The monetary needs described in the amount of the cash balance are expressed in hand-held cash and include not only the currency as the medium of the transaction, but also the currency of the storage, which is the key to the difference between the cambridge equation and the equation, and is reflected in the equation k。
Same point
The cambridge equation and the trade equation are consistent in nature and are an attempt to explain that price increases and currency values depend on changes in monetary volumes. Assuming that other factors remain unchanged, the price level is proportional to the amount of money and the monetary value is inversely proportional to the amount of money。
