On the short-run non-neutrality of money in the quantity theory

Recent years have seen a renewed interest in the traditional pre-Keynesian quantity theory. This paper is concerned with the contention that - in the formal development of this theory in the past - a change in the quantity of money expends itself solely in influencing the price level, but not the volume of output even in the short run. This contention about the nature of the theory seems to be common both to its critics and to at least one of its modern-day adherents. The author examines the writings of Irving Fisher, the Chicago school, the Cambridge economists, and other quantity theorists to determine the validity of the interpretations put forth by Lawrence Ritter and Milton Friedman. JEL: E31, E40, E51