# kaal:claim:3402701-008

**Claim.** Under the quantity theory of money, minting twice as much currency halves its price and burning half of the existing currency doubles it, which is the mechanism by which a supply rule can theoretically stabilize price.

**Type.** mechanism  **Support.** argued

**Holds when.**

- quantity theory of money holds
- price measured as an average across exchanges

**Source quote.**

> QTM dictates that minting twice as much currency will halve its price, and burning half of the existing currency will double its price

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Stable Cryptocurrencies - First Order Principles* (2019), 3.1 CURRENCY MINTING AND BURNING, page 16

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701

**Verify.** sha256 of source PDF `72ed2581b4cac2bd18a5b2640be959487a3cbc34c86ab5e5664924bcdb53c8e0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Stable%20Cryptocurrencies%20-%20First%20Order%20Principles.pdf

**Topics.** economics

**Keywords.** quantity-theory-of-money, minting, burning, price-stability

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