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The Equation of Exchange Revisited


  • Dirk Kaiser

    (Hochschule Bochum, Fachbereich Wirtschaft, Lehrgebiet für Betriebswirtschaftslehre, insb. Finanzmanagement, Banken und Versicherungen, Lennershofstraße 140, D-44801 Bochum)


The article presents a more general version of the equation of exchange providing separately for a financial turnover of money as well as a corresponding financial velocity of money. This sheds a special theoretical light on the easy monetary policy implemented by the Federal Reserve between 2001 and 2004 and the enlargement of the financial sphere in the United States, which persisted until the recent financial crisis broke out – to become an international economic crisis in due course.

Suggested Citation

  • Dirk Kaiser, 2011. "The Equation of Exchange Revisited," Credit and Capital Markets, Credit and Capital Markets, vol. 44(4), pages 491-507.
  • Handle: RePEc:kuk:journl:v:44:y:2011:i:4:p:491-507

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    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G01 - Financial Economics - - General - - - Financial Crises
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-


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