The Classical Framework

In the conventional interpretation of classical economics, the quantity theory of money is held to be an integral part of its conceptual framework. I shall seek to disprove that interpretation in what may be regarded as the negative, or essentially critical, aspect of my discussion. There is, however, an additional, positive task to be undertaken. I shall also attempt to draw together the elements of an alternative theory of price behaviour, which, it will be argued, is implicit in the classical framework. The discussion will therefore begin with a brief resume of this framework, a preliminary step made all the more necessary in view of successive attempts to recast the classical approach as a primitive variant of neoclassical analysis (e.g., Hollander, 1979).