Tim Congdon authored a new book, The Quantity Theory of Money: A New Restatement, last year. It is a historical retrospective of the classic quantity theory of money with some new twists. It is not a easy book for those who are not familiar with the long history of money. It takes a number of twists and turns on why some explanation do not work, but in the end, Congdon again emphasizes that money is at the heart of any discussion of inflation.
The key insight is that money will impact not just the bond market which is the traditional view in the classic IS-LM modei but will also affect othe asset markets and goods markets. Money seeps into everything we do. We have to also focus on broad money, and how it affects asset purchases and goods purchase decisions. The link between money and credit is a better description of how it impacts transactions nd prices than the simple Friedman money multiplier.
The inflation post-COVID should not have been a surprise for anyone who follows the money trail.
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