Money supply rule ineffective: Changes in prices not linked to supply.
The article discusses how the Quantity Theory of Money suggests that changes in the money supply affect prices. However, the study argues that changes in prices are actually due to shifts in demand and supply, not just the amount of money in circulation. This means that traditional monetary policies may not be effective in controlling inflation. The research shows that relying solely on the money supply rule can have negative impacts on the economy, as seen in past financial crises. Ultimately, the study suggests that a different approach to understanding economic agents' behavior may be more informative than the traditional view.