IMPORTING THE UNUSABLE: THE QUANTITY THEORY AND THE LDC'S.

The relevance of the Quantity Theory of Money to Developing economies is questioned. A skeptical examination of the facts upon which the theory is based, as well as of the theory itself , reveals much weakness. Indeed, it is the evidence from the developed economies that suffices to justify skepticism about the Quantity Theory. Money is a means to effect transactions and savings; what will be used as money depends upon such a miscellany of factors that no 'theory' can be expected to emerge. Monetary policy will be dependent on so many specific factors that most LDC's are probably better off using the general principles to develop their own 'theory'. [ABSTRACT FROM AUTHOR]