Answer to Question #311240 in Macroeconomics for Ronald

Question

What are the differences between the Fisherian and Cambridge versions of the

quantity theory of money?

Answer 1

The Fisherian approach emphasizes the medium of exchange function of money, whereas the Cambridge approach stresses the store of value function of money.

Fisher’s approach stresses the supply of money, whereas, the Cambridge approach lays more emphasis on the demand for money to hold cash.

The Fisherian approach regards as a flow concept; money is considered in terms of the flow of money expenditures. The Cambridge version regards money as a stock concept; money supply refers to a given stock at a particular point in time.