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Is there reason to think that velocity will remain low in the long term, though? If it's just temporary economic effects caused by COVID (e.g. less physical com
by dlubarov 6y ago
Is there reason to think that velocity will remain low in the long term, though? If it's just temporary economic effects caused by COVID (e.g. less physical commerce), then surely we will see higher inflation as those effects go away?
- dragonwriter 6y ago> Is there reason to think that velocity will remain low in the long term, though? There's reason to believe that as velocity rebounds, ceteris paribus, monetary policy will tighten to avoid rapid inflation. Congress may leave fiscal policy on autopilot all too often, but you aren't likely to find the Fed completely asleep at the monetary policy wheel.