Continue reading “UK Money Velocity has been trending downwards for years”
UK Money Velocity has been trending downwards for years
Here’s how Australian Money Velocity has changed over the years
Euro Area or Eurozone Money Velocity seems to be shockingly low
We couldn’t find any official Money Velocity numbers for the Euro Area (Eurozone) so calculated it using the Equation of Exchange
Equation of Exchange
MV=PQ
Money Supply (M) * Money Velocity (V) = Price level (P) * Real economic output (Q)
Which means Money Supply * Money Velocity = Nominal GDP
Therefore, Money Velocity = Nominal GDP/Money Supply
We have the numbers for both Money Supply (from OECD – Organization for Economic Co-operation and Development) and Nominal GDP (from Eurostat) for the Euro Area.
Continue reading “Euro Area or Eurozone Money Velocity seems to be shockingly low”
Here’s how much money supply has grown for major economies in the past decade (2008 to 2018)
Broad Money M3
Broad money (M3) includes currency, deposits with an agreed maturity of up to two years, deposits redeemable at notice of up to three months and repurchase agreements, money market fund shares/units and debt securities up to two years.
The curious case of low U.S. money velocity
From the Federal Reserve’s definition of Money Velocity and Money Supply,
Money Velocity
The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. Continue reading “The curious case of low U.S. money velocity”