Return to Contents Page

 


Money Demand

The Equation of Exchange

The equation of exchange, often expressed as M = k P Y or M V = P Y, plays central roles in both aggregate demand curves and demand for money.  A special page sorts out these roles for various macroeconomic theories.

Transactions Demand

Velocity is a function of the interest rate.  That is, M V(R) = P Y.

Speculative Demand

Precautionary Demand

Foreign Holdings

References:

 


Return Link:  Contents  Money  Monetarism

Comments?  Questions?  macro-at-econmodel-dot-com  Copyright 2006 William R. Parke