ABSTRACT
The classical and neoclassical economists as well as their monetarist relatives emphasize the long-term nature of the effects of money creation on the price level and care little about the process taking place. Building on Bodin, he introduced the concept of velocity of money and emphasized the nature of money in line with Aristoteles as a means of exchange by convention. Classical, Neoclassical and Keynesian economists can at least agree on the view that the excessive creation of money as it may emerge when low interest rates induce high demand for credit will lead to inflation in the long-term. They define inflation as a continuing increase of the general level of prices, which is usually defined as a weighted average of prices for goods and services demanded by a representative consumer. Inflation is the lifeblood and deflation the death of the credit money system. Inflation can manifest itself in a rise in consumer prices, asset prices or both.
