Money Multiplier and Velocity Playing for Money Neutrality

Abstract

Quantitative theory of money appears as having the most to say about the today money - e.g. this is a genuinely and largely developed and even developing theory of economics, a theory searching for relating the money base to real economy (i.e. national product or income) plus it verifies, as its basic equation (MV = PT) on long term. Despite that, there is another theoretical context putting this into a very shadow - i.e. the polemics of money being: (a) representative, versus (b) fiat - since this last polemics succeeds to push the quantitative theory off impartiality. In other words, the quantitative theory sees itself caught as limiting monetary base to money supply, as well as GDP to its nominal (money) value - i.e. no mention about money base itself that is the currency directly issued by the authority into the national area, as the one of validity.