The Origin Of Classical Dichotomy

Classical Economists thought that the change of money supply did not have an influence on the variable of economy, just like the output of the whole economy. So, they used to divide the whole economy into two different parts, one named as monetary economy, the other named as entity economy, and also, they applied this kind of concept into their economy research. This method in their economic research is known as Classical Dichotomy.Well, Classical Dichotomy is significant for most Classical Economists. To some extent, they could gain so much achievement just due to this method. So, searching for the origin of Classical Dichotomy is very important and helpful for the study of their economical thoughts, especially, for their monetary thoughts.Also, some experts have done some study into the development of Classical Dichotomy nowadays. For example, an essay I have read shows the development of Classical Dichotomy from KWicksell's theory of Cumulative process and John·Maynard·Keynes's theory of Effective Demand. Before the discussion of the development of Classical Dichotomy, it also explains what Classical Dichotomy is clearly based on Say's Law. It's a good essay, and I have learned a lot from it.Being different from those experts, I probe into Classical Dichotomy from two aspects: one is based on the difference of classical economists' monetary thoughts, the other is based on the development of social productivity. After that, I describe the processes that contemporary economists have made to amalgamate monetary economical theory and entity economical theory. In other word, this is a kind of development of Classical Dichotomy.Actually, to amalgamate monetary economical theory and entity economical theory is my essay's practical significance. As Adam-Smith said, money is the wheels of the whole economy. So, without money, the whole economy would be in trap.Now, I probe into the origin of Classical Dichotomy based on the discussion of the difference of those classical economists' monetary thoughts just for the amalgamation of monetary economical theory and entity economical theory. And this is the point that I will do some further study in the future.