Fisher's equation

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.

See also

• Quantity theory of money