Definition of quantity theory in English:

quantity theory

(also the quantity theory of money)


  • [mass noun] The hypothesis that changes in prices correspond to changes in the monetary supply.

    • ‘If these two variables were assumed to remain constant, then the simple quantity theory would predict the price level to change in proportion to a change in the money supply.’
    • ‘The correlation between price level and money supply is determined by the quantity theory of money.’
    • ‘Traditionally, classical economists supported the quantity theory of money as explaining price levels.’
    • ‘These essays show, however, that he clearly subscribes to the quantity theory of monetary history, although he does not address any of the criticisms which have been levelled against it.’
    • ‘Even among those who had previously espoused the quantity theory, almost no economist linked the economic recovery to growth of the money stock.’