Answer to Question #122879 in Macroeconomics for Zachary Beddingfield

Question

Hi! I am writing a broad overview of the different economic theories focusing on Classical, Keynesian, and Monetarism. My understanding is the modern accepted view of inflation is an increase in the money supply that is not met by a proportionate increase in RGDP, prompting increase in pricing. However, I'm uncertain if all three theories accept this. I'm familiar with their stances on fiscal and monetary policy, but do all three theories accept this formula for explaining inflation?

Answer 1

All the three theories are in harmony concerning the view of inflation and the supply of money in the economy.