Quantity theory of money: the hypothesis of the dichotomy between relative prices and absolute prices

Authors

  • Tito Belchior Silva Moreira Universidade Católica de Brasilia
  • Mario Jorge Mendonça IPEA
  • Adolfo Sachsida IPEA
  • Benjamin Miranda Tabak Universidade Catolica de Brasilia

DOI:

https://doi.org/10.5380/re.v41i1.41382

Keywords:

Quantity theory of money, relative prices, absolute prices, dichotomy.

Abstract

This paper aims to investigate the impact of a change in the quantity of money on relative prices based on quarterly time-series for the period 1959-2013 of the U.S. economy. The econometric results show evidence that a change in the money supply affects the relative prices. This result does not corroborate the assumption that changes in relative prices only occur due to changes in real variables, but changes in relative prices also occur via changes of the money stock. In this sense, there is no empirical evidence that the hypothesis of the dichotomy between relative prices and absolute prices is valid.

Author Biography

Tito Belchior Silva Moreira, Universidade Católica de Brasilia

Departamento de Econaomia da UCB

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Published

2015-05-01

How to Cite

Moreira, T. B. S., Mendonça, M. J., Sachsida, A., & Tabak, B. M. (2015). Quantity theory of money: the hypothesis of the dichotomy between relative prices and absolute prices. Revista De Economia, 41(1). https://doi.org/10.5380/re.v41i1.41382

Issue

Vol. 41 No. 1 (2015)

Section

Artigos

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