IDEAS home Printed from https://ideas.repec.org/a/eee/phsmap/v353y2005icp493-500.html
   My bibliography  Save this article

The velocity of money in a life-cycle model

Author

Listed:
  • Wang, Yougui
  • Qiu, Hanqing

Abstract

The determinants of the velocity of money have been examined based on life-cycle hypothesis. The velocity of money can be expressed by reciprocal of the average value of holding time that is defined as interval between participating exchanges for one unit of money. This expression indicates that the velocity is governed by behavior patterns of economic agents and opens a way for constructing micro-foundation of it. It is found that time pattern of income and expense for a representative individual can be obtained from a simple version of life-cycle model, and average holding time of money resulted from the individual's optimal choice depends on the expected length of relevant planning periods.

Suggested Citation

  • Wang, Yougui & Qiu, Hanqing, 2005. "The velocity of money in a life-cycle model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 353(C), pages 493-500.
    • Handle: RePEc:eee:phsmap:v:353:y:2005:i:c:p:493-500
    DOI: 10.1016/j.physa.2005.01.053
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378437105000737
    Download Restriction: Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000
    File URL: https://libkey.io/10.1016/j.physa.2005.01.053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    2. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, July.
    3. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yougui Wang & Ning Ding, 2005. "Dynamic Process of Money Transfer Models," Papers physics/0507162, arXiv.org.
    2. Bamadev Paudel, 2017. "Alleviating Poverty through Job Creation: Quantity Equation of Money may Come into Play," Journal of Development Innovations, KarmaQuest International, vol. 1(1), pages 84-113, February.
    3. Yougui Wang & Ning Ding & Ning Xi, 2005. "Prospects for Money Transfer Models," Papers physics/0507161, arXiv.org.
    4. Xing, Xiaoyun & Xiong, Wanting & Chen, Liujun & Chen, Jiawei & Wang, Yougui & Stanley, H. Eugene, 2018. "Money circulation and debt circulation: A restatement of quantity theory of money," Economics Discussion Papers 2018-1, Kiel Institute for the World Economy (IfW Kiel).
    5. Barrio, Rafael A. & Govezensky, Tzipe & Ruiz-Gutiérrez, Élfego & Kaski, Kimmo K., 2017. "Modelling trading networks and the role of trust," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 471(C), pages 68-79.
    6. repec:kqi:journl:2017-1-5 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    2. Asahi Noguchi, 2020. "Shifting Policy Strategy in Keynesianism," Papers 2006.11749, arXiv.org.
    3. Mehmet Balcilar & Rangan Gupta & Stephen M. Miller, 2014. "Housing and the Great Depression," Applied Economics, Taylor & Francis Journals, vol. 46(24), pages 2966-2981, August.
    4. Farmer, Roger E. A. & Plotnikov, Dmitry, 2012. "Does Fiscal Policy Matter? Blinder And Solow Revisited," Macroeconomic Dynamics, Cambridge University Press, vol. 16(S1), pages 149-166, April.
    5. Craig Freedman & Geoff C. Harcourt & Peter Kriesler & John Nevilet, 2013. "Milton Friedman: Constructing an Anti-Keynes," Discussion Papers 2013-35, School of Economics, The University of New South Wales.
    6. Arghyrou, Michael G, 2014. "Is Greece turning the corner? A theory-based assessment of recent Greek macro-policy," Cardiff Economics Working Papers E2014/16, Cardiff University, Cardiff Business School, Economics Section.
    7. Joshua R. Hendrickson, 2017. "An Evaluation of Friedman's Monetary Instability Hypothesis," Southern Economic Journal, John Wiley & Sons, vol. 83(3), pages 744-755, January.
    8. Homburg, Stefan, 2017. "A Study in Monetary Macroeconomics," OUP Catalogue, Oxford University Press, number 9780198807537.
    9. Sedlarski, Teodor, 2012. "Монетаристко Развитие На Теорията На Търсенето На Пари [Monetarist development of the money demand theory]," MPRA Paper 56694, University Library of Munich, Germany.
    10. N. G. Mankiw, 2009. "The Macroeconomist as Scientist and Engineer," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 5.
    11. Nelson, Edward & Schwartz, Anna J., 2008. "The impact of Milton Friedman on modern monetary economics: Setting the record straight on Paul Krugman's "Who was Milton Friedman?"," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 835-856, May.
    12. Andrea Giorgio Tosato, 2022. "Considerations on the Monetary Policy Framework of the European Central Bank," CBM Working Papers WP/01/2022, Central Bank of Malta.
    13. Arie Harel & Jack Clark Francis & Giora Harpaz, 2018. "Alternative utility functions: review, analysis and comparison," Review of Quantitative Finance and Accounting, Springer, vol. 51(3), pages 785-811, October.
    14. Sylvie Rivot, 2017. "Economic policy as expectations management: Keynes’ and Friedman's complementary approaches," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 24(5), pages 1053-1084, September.
    15. Lothian, James R., 2009. "Milton Friedman's monetary economics and the quantity-theory tradition," Journal of International Money and Finance, Elsevier, vol. 28(7), pages 1086-1096, November.
    16. Jędruchniewicz Andrzej, 2014. "Money Supply as the Target of the Central Bank," Folia Oeconomica Stetinensia, Sciendo, vol. 14(1), pages 1-21, June.
    17. Jitka Koderová, 2012. "Milton Friedman and the Contemporary Monetary Policy [Milton Friedman a současná měnová politika]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2012(4), pages 15-31.
    18. Jiří Schwarz, 2005. "The Economic history and the economics [Hospodářské dějiny a ekonomie]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2005(3), pages 152-162.
    19. Chul‐Woo Kwon & Peter F. Orazem & Daniel M. Otto, 2006. "Off‐farm labor supply responses to permanent and transitory farm income," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 59-67, January.
    20. Bunting, David, 2009. "The saving decline: Macro-facts, micro-behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 282-295, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:353:y:2005:i:c:p:493-500. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.