Reconstructing the Quantity Theory (II)

20 Pages Posted: 2 Aug 2011 Last revised: 23 Feb 2015

See all articles by Egmont Kakarot-Handtke

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Date Written: August 2, 2011


Part I and II of the present paper reconstruct the quantity theory from structural axiomatic foundations. This yields a coherent view of the interrelations of quantity of money, transaction money, saving–dissaving, liquidity–illiquidity, rates of interest, leverage, allocation of labor, prices, profits and employment. Part II focuses on the symmetric and asymmetric process of nominal and real saving–dissaving and on the monetization of nonfinancial assets. The distinction between liquidity preferences of individual households and the household sector as a whole proves to be crucial. From the objective structural axiom set follows a structural inflation formula.

Keywords: new framework of concepts, structure-centric, axiom set, complementary time preference, time transfer, real rate of interest, inventory, store of value, nonmonetary profit, transmission mechanism, asset/liability structure, capital market

JEL Classification: E10, E20, E40

Suggested Citation

Kakarot-Handtke, Egmont, Reconstructing the Quantity Theory (II) (August 2, 2011). Available at SSRN: or

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

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