The Quantitative Theory Of Money: An Approach To The Colombia Case

Abstract

The quantitative theory of money is an essential part of the study of monetary dynamics in the economy, this field of study is important to understand the supply and demand movements of money, inflation management and the search for sustainable growth. This paper makes an approximation to the demand for money in the Colombian economy, for this purpose an econometric model was built using the variables exposed by the monetarist school. The model analyzes the period from the first quarter of 2005 to the first quarter of 2020. Additionally, the model complied with the assumptions of the ordinary least squares methodology to construct the demand for money in Colombia in the pre-pandemic period of Covid 19.