quantity theory


: a theory in economics: changes in the price level tend to vary directly with the amount of money in circulation and the rate of its circulation

Examples of quantity theory in a Sentence

Recent Examples on the Web Leaving aside such omissions, what does the quantity theory of money have to say about inflation? John Greenwood, National Review, 15 Jan. 2024 The quantity theory of money, coupled with the relevant U.S. metrics, says that an M2 growth rate of around 6 percent per year should do the trick. John Greenwood, National Review, 15 Jan. 2024 To put those numbers into context, based on the quantity theory of money, the rate of growth of the money supply that is consistent with the Federal Reserve’s hitting its 2 percent inflation target is 5–6 percent per year. Steve H. Hanke, National Review, 22 Mar. 2023 In context, Friedman wasn’t saying that the quantity theory of money had been unsuccessful and that there is no relationship between the money supply, broadly measured, and inflation. WSJ, 22 Jan. 2023 Occasionally, anti-monetarists such as Mr. Katz have jumped all over this quote to argue that, late in life, Friedman abandoned his life’s work, namely, the quantity theory of money. WSJ, 22 Jan. 2023 This mechanism, which is based on the quantity theory of money, was evident after the monetary injections coincident with the onset of the Covid-19 pandemic. Dick Lepre, National Review, 14 Dec. 2022 Today, monetarism’s quantity theory of money is out of vogue, to put it mildly. Shawn Tully, Fortune, 8 Oct. 2022 On the other hand, the Keynesians said that quantity theory of money didn’t work because the Fed’s balance sheet expanded enormously, but the U.S. didn’t experience much inflation. Shawn Tully, Fortune, 13 Apr. 2022

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'quantity theory.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1888, in the meaning defined above

Time Traveler
The first known use of quantity theory was in 1888

Dictionary Entries Near quantity theory

Cite this Entry

“Quantity theory.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/quantity%20theory. Accessed 13 Jun. 2024.

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