The Mathematical Decomposition of the Transactions Velocity of Money
This paper is an attempt to decompose the average transactions velocity of money into two or more individual velocities. When the economy-wide velocity is expressed as a weighted average of two disaggregated velocities, this provides an equation with two unknowns. The additional equation can be created from the concept of two versions of the exchange equations; the Fisherian and Cambridge equation. The former represents the Fisherian problem, while the latter the Marshallian problem. Their integration furnishes us with the second equation to solve the system
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- Barry Eichengreen & Charles Wyplosz, 1993. "The Unstable EMS," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 51-144.
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- Thomas M. Humphrey, 1993. "The origins of velocity functions," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 1-18.
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