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The “Cambridge” Critique of the Quantity Theory of Money. A Note on How Quantitative Easing Vindicates It

In: Economic Theories, Protagonists and Facts

Author

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  • Maria Cristina Marcuzzo

    (Sapienza University of Rome)

Abstract

Through quantitative easing markets have been flooded with liquidity, but rather than inflation we have witnessed a general deflation because of the liquidity trap environment in which the banking system operated; this article revisits the arguments against the quantity theory in the “Cambridge” tradition of John Maynard Keynes, Richard Kahn, and Nicholas Kaldor, and defends their soundness and topicality.

Suggested Citation

  • Maria Cristina Marcuzzo, 2024. "The “Cambridge” Critique of the Quantity Theory of Money. A Note on How Quantitative Easing Vindicates It," Palgrave Studies in the History of Economic Thought, in: Economic Theories, Protagonists and Facts, chapter 0, pages 211-226, Palgrave Macmillan.
    • Handle: RePEc:pal:pshchp:978-3-031-63949-4_12
    DOI: 10.1007/978-3-031-63949-4_12
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    References listed on IDEAS

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    1. Antonella Tutino & Carlos E. Zarazaga, 2014. "Inflation is not always and everywhere a monetary phenomenon," Economic Letter, Federal Reserve Bank of Dallas, vol. 9(6), pages 1-4, June.
    2. L. R. Wray, 1990. "Money and Credit in Capitalist Economies," Books, Edward Elgar Publishing, number 474, March.
    3. Vasilev, Aleksandar & Maksumov, Rashid, 2010. "Critical analysis of Chapter 23 of Keynes’s Notes on Mercantilism in The General Theory of Employment, Interest and Money (1936)," EconStor Research Reports 155318, ZBW - Leibniz Information Centre for Economics.
    4. Targetti, Ferdinando, 1992. "Nicholas Kaldor: The Economics and Politics of Capitalism as a Dynamic System," OUP Catalogue, Oxford University Press, number 9780198283485.
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    Cited by:

    1. Maciej Ryczkowski, 2021. "Money and inflation in inflation-targeting regimes – new evidence from time–frequency analysis," Journal of Applied Economics, Taylor & Francis Journals, vol. 24(1), pages 17-44, January.
    2. Boháčik Ján, 2022. "Financial shocks and their effects on velocity of money in agent-based model," Review of Economic Perspectives, Sciendo, vol. 22(4), pages 241-266, December.

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    More about this item

    Keywords

    Cambridge monetary theory; Inflation; Quantitative easing;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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