Explaining qualification inflation using Quantity Theory of Money logic

(Academic) Qualification inflation can be explained using logic of Quantity Theory of Money. First of all, a definition of terms:

MV = pO

• M is the supply of qualification certificates in the economy
• V is the velocity of academic certificates being processed in labour market transactions
• O is the aggregated intellectual competence of the aggregated human resource in an economy
• p is the Academic qualification inflation index in an economy.

As M and V increase while O remains constant (and probably drops), p (academic qualification inflation) must have increased substantially. The consequence is that the academic qualification has lower and lower reference value on the cert-holders' intellectual ability - which is what academic qualification inflation is all about. What happens is there are more and more people with many advanced academic qualifications but who are not intellectuals (obviously not scholars) and who do not do much reading on textbooks and academic journals.




Reference
On Quantity theory of money: http://en.wikipedia.org/wiki/Quantity_theory_of_money