Chapter 8 THE EQUATION OF EXCHANGE

Fisher leading, most consistent, most uncompromising quantity theorist: wide acceptance of his views 154

Taussig vs. Fisher 155

Fisher and dodo-bone doctrine: logical part of quantity theory; Fisher's value concept 155-156

"Equation of exchange": analysis of Fisher's version, typical of all 156-171

In what sense equality between two sides of equation? Meaning of "T" 158-161

No "goods side" to equation; both sides sums of money; equal because identical; equation meaningless 161-162

All factors in equation highly abstract 162-163

"P" and "T" cannot both be given independent definitions: P defined as weighted average, with T in denominator; and must be changed from year to year, as elements in T change, even though no prices change 164-166

This makes circular theory: problem defined in terms of explanation 165-166

Causal theory associated with equation of exchange 166

Equation amplified to include credit; not acceptable to Nicholson or Walker, and caricature of conditions in Germany and France 166-170

Book-credit, bills of exchange, etc., excluded 167-170

Why a one-year period? 170-171