Mỗi đồng tiền này lại có tên của moneyer chịu trách nhiệm và của thị trấn bạc hà. Các thiết kế trên những đồng xu đã được thay đổi mỗi sáu năm. Một sự giàu có của lịch sử , bởi ý nghĩa, đáp ứng các chi phí khác bằng séc, thường là trong giải quyết các tài khoản tín dụng của một thương gia. | INTRODUCTION 117 important as background for Chapter 14 but not particularly relevant for modern times except for those concerned with Islamic banking. MONEY THEORY The classic Fisher 1911 quantity theory of money is often stated by the formula MV PT. This is a tautology in the sense that it must be true provided that the terms are consistently defined. If M quantity of money rises without any change in V velocity of circulation of that money and T volume of transactions then P prices will inevitably rise. This begs the question of the nature and direction of any causal relationship and specifically of whether velocity V is independent. It is perfectly possible that in certain circumstances an increase in the money supply M could simply be met by a fall in velocity V. Similarly an increase in V would have an effect on prices even if M remained constant. Throughout history and particularly during the period we are discussing there is a tendency for the means of payment to be expanded. Coin is supplemented first by bank notes and bills of exchange and later by bank deposits credit cards and interest bearing current accounts. These become effective money substitutes and arguably money itself. Should we look at such a development as a change in the nature of M or a change in V In an all-coinage economy the concept is simple. The quantity of money is measured by the number of gold sovereigns or silver groats or whatever in circulation and velocity is measured by the average number of times those coins change hands in the literal sense each year in the course of trade. Assume a gold coin changes hands ten times per annum this may imply that a typical merchant finds it convenient to hold 10 per cent of his annual turnover or a customer 10 per cent of his annual expenditure in the form of coins. The velocity of circulation would be ten. With the growth of credit and trade bills in the fourteenth century it became possible to transact business between merchants without .
