C/E/12. Monetary economics. Does money cause inflation or does inflation cause money?

Conclusion
The quantity theory of money, both for simple and general demand for money functions, implies that the any changes in the money stock not matched by changes in the output will be observed in changed prices. Empirical evidence provides solid support for this theoretical insight and allows one to conclude that money indeed causes inflation in the long run. In this model prices serve as the equilibrating variable over the long run between the demand and the supply of money. Supply of the monetary stock is controlled by the monetary writerities and is not determined within the system, thus it can not be determined because it is given exogenously. Therefore the claim that inflation causes money is false in the long run.