Fisher's equation: Difference between revisions
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A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices. | A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices. | ||
The equation is conventionally expressed as: P = MV/T | The equation is conventionally expressed as: | ||
P = MV / T | |||
Where: | Where: | ||
P = the general level of prices | :P = the general level of prices, | ||
M = the quantity of money in the economy | :M = the quantity of money in the economy, | ||
V = its velocity of circulation, | :V = its velocity of circulation, | ||
T = the volume of transactions in a given period. | :T = the volume of transactions in a given period. | ||
== See also == | == See also == | ||
* [[Quantity theory of money]] | * [[Quantity theory of money]] | ||
Revision as of 11:26, 18 March 2015
Economics.
A formal expression of the quantity theory of money defining the relationship between the quantity of money in the economy, its velocity of circulation, the number of transactions over a given period and the general level of prices.
The equation is conventionally expressed as:
P = MV / T
Where:
- P = the general level of prices,
- M = the quantity of money in the economy,
- V = its velocity of circulation,
- T = the volume of transactions in a given period.
