Money for the classics have one role and it is to determine the general price level. David Rekardo is one of a klasichiskata school. It expresses two contradictory statements.
The first is associated with commodity money. Gold and sribroto were izpoldvani as cash. For Rinardo were ordinary stock, cheyata opredeya value of the amount of labor invested in their proizvodstvol where removal is the first principle, if necessary for the production of commodity money reduces the amount of labor, the proposed amount of money increases. Value of money is determined in the field of production and prices are those that determine the economic equilibrium of the corresponding quantity of commodity money.
When the state holds a monopoly on the issue of commodity money, regardless of whether they are of metal or paper, the value will be determined in their circulation.
D. S. Mill, a representative of the classical school tvyardi that cost money are equal in value to the goods that can bowl with them. But spending money and money is not one thing sashto. One sashta and currency can fund multiple transactions during a given period. It follows that the money but have outstanding speed. The rate is determined: V = PxT / M, nadeto P - price level, T - the volume of transactions and M-money in circulation. This equation is the basis of the quantity theory of money. According to the classical volume of transactions can be accepted as permanent.
For early classics money consists of metal and paper money. In the 19th century in England parazhda dispute. It consisted in opposing privyarzhenitsite strictly regulate the supply of paper money and those who preach the competitive supply of paper money. Rekardo recommended the issue of paper money is 100% covered with gold held in central bank.
In 1911 AA Fischer adds latest additions to the quantity theory, as it attempts to mathematical formalization. Not a bit away from the analysis of its predecessors, but he formulated uravnenieta exchange as follows:
MxV = PxT
To take account of different forms of money Fischer offers an expanded version of an exchange equation: MxV + M'xV '= PxT.
Where M - money and coins, M '- bank money, V and V'-speed two cash formi.Fisher believe that velocity depends on the density of tartovskite customs, the speed of transportation, but not by zavisyan amount of money in circulation and deposits nor the general price level.