Conversation with John Aziz on Quantity Theory vs Quantity Equation

John Aziz, of Azizonomics, and I had a conversation this morning on this topic. Aziz’s question was:

Why did Milton Friedman say inflation was always a monetary phenomenon when his own equation says it is a combination of 3 variables?

My answer was (paraphrasing):

Quantity equation =/= quantity theory…inflation=money comment doesn’t arise from the QE, but the QT.

More comments to come.

Update: Links were messed up, fixed now.


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