3 ms·
That's the point though, inflation depends a great deal on the velocity of money, as much or even more so than the total amount printed. Money in a vault has z
by throwaway2048 5y ago
That's the point though, inflation depends a great deal on the velocity of money, as much or even more so than the total amount printed.
Money in a vault has zero velocity, money being spent dozens of times a day has a very high velocity, most situations lie between, we need a meaningful way of discussing this that "monetary supply" does not capture.
- rogueSkib 5y agoI think Lyn Alden does a good job separating velocity from inflation in this article: https://www.lynalden.com/inflation/ https://www.lynalden.com/inflation/ There is a common idea that high monetary velocity (GDP divided by broad money supply) is needed for inflation. However, the data show that this is not the case.