The quantity theory of money is the basis for understanding price changes in relation to the money supply in the economy.
It is argued that an increase in the money supply generates inflation and vice versa.
The Irving Fisher model is most often used to apply the theory. Other competing models were formulated by the British economist John Maynard Keynes, the Swedish economist Knut Wicksell, and the Austrian economist Ludwig von Mises.
Other models are dynamic and assume an indirect relationship between the money supply and price changes in the economy.