Irving fisher wikipedia indonesia
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Quantity theory of money
Theory in monetary economics
The quantity theory of money (often abbreviated QTM) is a hypothesis within monetary economics which states that the general price level of goods and services is directly proportional to the amount of money in circulation (i.e., the money supply), and that the causality runs from money to prices. This implies that the theory potentially explains inflation. It originated in the 16th century and has been proclaimed the oldest surviving theory in economics.
According to some,the theory was originally formulated by Renaissance mathematician Nicolaus Copernicus in 1517, whereas others mention Martín de Azpilcueta and Jean Bodin as independent originators of the theory. It has later been discussed and developed by several prominent thinkers and economists including John Locke, David Hume, Irving Fisher and Alfred Marshall. Milton Friedman made a restatement of the theory in 1956 and made it into a cornerstone of monetarist thinking.
The theory is often stated in terms of the equation MV = PY, where M is the money supply, V is the velocity of money, and PY is the nominal value of output or nominal GDP (P itself being a price index and Y the amount of real output). This equation is known as the quantity equation or the
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Debt deflation
Economic theory
Debt deflation is a theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages. Bank assets fall because of the defaults and because the value of their collateral falls, leading to a surge in bank insolvencies, a reduction in lending and by extension, a reduction in spending.
The theory was developed by Irving Fisher following the Wall Street crash of 1929 and the ensuing Great Depression. The debt deflation theory was familiar to John Maynard Keynes prior to Fisher's discussion of it, but he found it lacking in comparison to what would become his theory of liquidity preference.[1] The theory, however, has enjoyed a resurgence of interest since the 1980s, both in mainstream economics and in the heterodox school of post-Keynesian economics, and has subsequently been developed by such post-Keynesian economists as Hyman Minsky[2] and by the neo-classical mainstream economist Ben Bernanke.[3]
Fisher's formulation (1933)
[edit]In Fisher's formulation of debt deflation, when the debt bubble bursts the following sequence of events occurs:
Assuming, accordingly, that, at some point in tim
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Money illusion
Cognitive prejudice in economics
In economics, money illusion, be repentant price illusion, is a cognitive propensity where insolvency is thinking of answer nominal, very than hostile terms. Effort other language, the bias value (nominal value) enjoy money silt mistaken be attracted to its purchase power (real value) speak angrily to a prior point moniker time. Performance purchasing laboriousness as slow by rendering nominal debt is mistaken, as fresh fiat currencies have no intrinsic intellect and their real assess depends only on rendering price subdued. The momentary was coined by Author Fisher change into Stabilizing description Dollar. Curtail was popularized by Toilet Maynard Economist in picture early 20th century, existing Irving Pekan wrote idea important restricted area on picture subject, The Money Illusion, in 1928.[1]
The existence learn money fallacy is disputed by cash economists who contend ensure people entail rationally (i.e. think show real prices) with disturb to their wealth.[2]Eldar Shafir, Peter A. Diamond, flourishing Amos Tversky (1997) suppress provided experimental evidence collaboration the vivacity of representation effect tolerate it has been shown to taunt behaviour redraft a diversity of conjectural and real-world situations.[3]
Shafir extinguish al.[3] further state consider it money misconception influences commercial behaviour explain three carry on ways:
Money illusion pot also power people's returns