Before looking at the data and evidence supporting the quantity theory of money, we will focus on some opponents’ claims about this theory. Opponents of the theory has argued that the theory falls short, as it does not take into consideration the demand for money, simply the supply. The theory assume it is not put in practice under the neoclassical model with zero regulatory interference where supply would be set equal to demand, and prices tend to be sticky in the short run. According to an online article, the president of Argentina’s central bank, Mercedes Marcó del Pont, affirms that it is not true that “printing more money generates inflation” and believes “inflation is rooted in other causes.” As she added to the interview with two pro-government local newspapers Página 12 and Tiempo Argentino,...
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... short-run that the increase in money supply does not affect the price. Critics of the theory argue that money velocity is not stable and, in the short-run, prices are sticky, so the direct relationship between money supply and price level does not hold. Nevertheless, there are enough data and proof for the relationship between high level of money supply and higher inflation rate in the long- run saying that money supply has a direct relationship with the price level.
Gerlach, Stefan.”Testing the Quantity Theory Using Long-Run Average Cross-Country Data.”
1995. PDF file.
"Printing Money Does Not Lead to Inflation, Argues Argentine Central Bank
President." MercoPress. N.p.,26 Mar. 2012. Web. 02 May 2014.
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