Patricia Aas1/ Fine. Milton Friedmans: The Optimum Quantity of Money
For the record: It is my opinion that this man should've stood trial for crimes against humanity.
2/ Introduction: He states that when examining the optimum quantity of money one will also examine
1. the optimum behavior of the price level
2. the optimum rate of interest
3. the optimum stock of capital
4. the optimum structure of capital
1. the optimum behavior of the price level
2. the optimum rate of interest
3. the optimum stock of capital
4. the optimum structure of capital
3/ Part 1: "Hypothetical Simple Society"
1. Constant population (the beings are either immortal or represent a lineage) (??!!?)
2. given tastes
3. fixed volume of physical resources
4. "a given state of the arts" (?)
5. "The society, though stationary, is not static." (?)
6. Competition reigns (surprised face)
7. Capital goods are infinitely durable, cannot be reproduced, used up or damaged
8. Capital goods are owned, but cannot be bought or sold
9. No lending or borrowing
10. "The only exchange is of services for money or money for services or services for services"
11. prices can change freely
12. all money is fiat (dollars)
13. There are 1000$
1. Constant population (the beings are either immortal or represent a lineage) (??!!?)
2. given tastes
3. fixed volume of physical resources
4. "a given state of the arts" (?)
5. "The society, though stationary, is not static." (?)
6. Competition reigns (surprised face)
7. Capital goods are infinitely durable, cannot be reproduced, used up or damaged
8. Capital goods are owned, but cannot be bought or sold
9. No lending or borrowing
10. "The only exchange is of services for money or money for services or services for services"
11. prices can change freely
12. all money is fiat (dollars)
13. There are 1000$
4/ Part 2: "Initial equilibrium position"
Our society has somehow reached some sort of "equilibrium".
We start with ""why have money?"
Basically to pay for stuff or save, and then he decides that on average people will "hold" is 1/10 of a years income.
Our society has somehow reached some sort of "equilibrium".
We start with ""why have money?"
Basically to pay for stuff or save, and then he decides that on average people will "hold" is 1/10 of a years income.
5/ Part 3: "Effect of Once-and-for-all change in the nominal quantity of money"
A helicopter drops 1000$ on the society (for real it says that)
Everyone thinks this is a freak one-off event
By yet another freak accident, everyone gets exactly the amount they had before, effectively doubling their money.
He now assumes they will all spend it
"The assumption that he was in a stable equilibrium position before means that he will now want to raise his consumption and reduce his cash balances until they are back at the former level" (this guy is a trip)
They can only trade with each other. So when one spends another gains (which tbh should cause that person to need to spend more which would cause someone else to get more and they'll all just go nuts in some messed up infinite loop?)
Basically he just draws the conclusion that "obviously" prices will double.
Jan Lehnardt 
@Patricia is this the “given a perfect sphere and no atmosphere” of economics?!
@janl This is the fucking paper they based all of this shit on
@Patricia 🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥