What is ascientific proposition? Is Quantity Theory of money a scentific proposition?

Question

What is ascientific proposition? Is Quantity Theory of money a scentific proposition?

Answer 1

Economics and Quantity Theory of money :

A science sets out to adequately delimit the problems likely to define a field of research and on which a consensus can be reached……

This simple sentence supports our proposition that “economics is not a science” and explains it further: given that economics remains undefined, it cannot as a whole be considered and accepted as a science.  How then, should we go about effectively delimiting these problems so as to be able to constitute a domain that can be studied scientifically?  My answer takes the form of identifying a necessary and sufficient condition:

In order to develop a scientific discourse in economics, it is necessary and sufficient to privilege certain aspects of this Totalité, to distinguish the aspects that we wish to study, in other words, to define the object of study.

All positive economic discourse is simply the expression of a certain point of view on economic reality, a point of view that consists of defining an object within a whole and constructing for this object a scientific theory.

In economics, the quantity theory of money is a theory emphasizing the positive relationship of overall prices or the nominal value of expenditures to the quantity of money.

Answer 2

A propsition is a scientific proposition if its expressed in a form that it can be tested for it validity. The propostion must be falsifiable .

Quantity theory of money is a scientific proposition because it is proposition that is falsifiable or verifiable.

The basic equation: P*T= M*V or P*Y = M*V can be emperically tested even if it is or does look like an identity. Each of these variables P.Y, T, M, V are.measurable / quantifiable. And the relationship between these variables can be estimated empirically.  Even, conditions can be cited under which the equation may not hold true. The quantity theory is therefore tested for its falsifiabilty. This is unlike the Marsian theory of surplus labor value ( as dintiguished from the concept of profit) is unverifiable.

Answer 3

The first part of the question is satisfactorily answered. The second part: is Quantity Theory a scientific proposition needs some refined answer. The world or universe is governed by two great laws: Law of Conservation (of Mass or energy or wealth as the case may be) and Law of Equilibrium. This Quantity Theory is based on these two laws and hence is foolproof.

Regarding mv= py,  actually velocity in the equation is meaningless. All reactions involving change of wealth are reversible. This is the reason we ought to have a credit for every debit in accountancy. Every time money changes or gets transacted goods and servies too get changed or transacted and hence v has no meaning.

I advise you to study wealth the way chemists study matter.

Answer 4

It will be a scientific proposition if it is well derived from the axioms.

MV=PY

M represents the monetary mass  and it´s a stock variable

V represents velocity goods are bought and sold and it´s a data than can change. It´s an stream variable.

P represent prices and it can be considered a fixed data in the short run but it can also change.

Y represents the output and it´s a stock variable

This equation has amazed all the economists for decades and it´s not quite simple to see why. What is surprising is the variable V that belongs to a world of physics. Velocity can be measured calculating the distance covered by an object  per unit of time. I mean velocity of anything make necessary the use of the variable time.

However if we isolate V we get

V=PY/M

we get an interpretation of velocity in which time is not present. Velocity to economists is a rotation of stocks but P is only an stock variable in the short run. What is confusing is that velocity is not a right name for a ratio.

PY=100

M=2

V=50

means that we can pay fifty times for the output using the total monetary mass. We suppose that the unit of time is the current year.

So far I cannot tell you if it´s a scientific proposition. Some economists use it in the following way

M=µP

µ=V/Y

This new equation is useful for the monetarists because changes in the monetary mass will provoke changes in the level of prices. Velocity/Output is considered a constant.

MV=PY is an equation difficult to use but nobody has proved  it´s false.