4 ms·
This is an interesting question to ask, but velocity of money has been declining for about 25 years now and shows no signs of stopping[0] (the recent large drop
by jeffreyrogers 5y ago
This is an interesting question to ask, but velocity of money has been declining for about 25 years now and shows no signs of stopping[0] (the recent large drop is due to the stimulus).
[0]: https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
- WheelsAtLarge 5y agoI've wondered about the utility of velocity now that the money supply can be increased at will. In the past when there was a limit I can understand why it was useful but now there are many dollars sitting in bank accounts that are not being used so I can see why it's declining and it seems that that won't change given the feds constant expansion of the money supply. There's also the fact that the dollar has become a worlds currency whose velocity is hard to measure. We need an alternative way to measure the dollars utility to the economy.