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E. W. Kemmerer's contribution to the quantity theory of money

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  • Rebeca Gomez Betancourt

    (TRIANGLE - Triangle : action, discours, pensée politique et économique - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper aims at suggesting a new interpretation of Edwin Walter Kemmerer's quantity theory of money as it appears in his Money and Credit Instruments in Their Relation to General Prices (1903, PhD thesis; and 1907, first edition of the book). In that work, he proposes an equation to determine the price level as the ratio of its monetary and real determinants. The paper addresses Kemmerer's key question of how money and credit are related to general prices. Two directions are investigated. Firstly, I explain Kemmerer's quantity theory by means of his exchange equation and how his interpretation may have influenced Fisher's economic theory. Secondly, I consider his test of the quantity theory on the US economy and I show the empirical validity of his theory. It is argued here that both elements give a key contribution to finding a new interpretation of the deepest meaning of Kemmerer's approach to quantity theory.

Suggested Citation

  • Rebeca Gomez Betancourt, 2010. "E. W. Kemmerer's contribution to the quantity theory of money," Post-Print halshs-00458052, HAL.
    • Handle: RePEc:hal:journl:halshs-00458052
    DOI: 10.1080/09672560903204460
    as

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    References listed on IDEAS

    as
    1. Mill, John Stuart, 1848. "Principles of Political Economy (II): Distribution," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number mill1848-2.
    2. Mill, John Stuart, 1848. "Principles of Political Economy (III): Exchange," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 3, number mill1848-3.
    3. Timberlake, Richard H., 1993. "Monetary Policy in the United States," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226803845, January.
    4. Mill, John Stuart, 1848. "Principles of Political Economy (I): Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number mill1848-1.
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    Cited by:

    1. Rebeca Gomez Betancourt & Jérôme de Boyer des Roches, 2013. "Origins and developments of Irving Fisher's compensated dollar plan," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(2), pages 261-283, April.
    2. Robert W. Dimand & Rebeca Gomez Betancourt, 2012. "Retrospectives: Irving Fisher's Appreciation and Interest (1896) and the Fisher Relation," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 185-196, Fall.
    3. Ivo Maes & Rebeca Gomez Betancourt, 2018. "Paul van Zeeland and the First Decade of the US Federal Reserve System: the Analysis from a European Central Banker who was a Student of Kemmerer," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2018(2), pages 5-32.
    4. repec:dau:papers:123456789/6554 is not listed on IDEAS
    5. repec:dau:papers:123456789/10195 is not listed on IDEAS
    6. repec:dau:papers:123456789/10190 is not listed on IDEAS

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