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The Mathematical Decomposition of the Transactions Velocity of Money

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  • Hakun Kim

Abstract

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

Suggested Citation

  • Hakun Kim, 2004. "The Mathematical Decomposition of the Transactions Velocity of Money," Econometric Society 2004 Far Eastern Meetings 550, Econometric Society.
    • Handle: RePEc:ecm:feam04:550
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    References listed on IDEAS

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    4. Richard T. Selden, 1961. "The Postwar Rise In The Velocity Of Money A Sectoral Analysis," Journal of Finance, American Finance Association, vol. 16(4), pages 483-545, December.
    5. Peter Howells & Iris Beifang-Frisancho Mariscal, 1992. "An Explanation for the Recent Behavior of Income and Transaction Velocities in the United Kingdom," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 14(3), pages 367-389, March.
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    Keywords

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    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • G2 - Financial Economics - - Financial Institutions and Services

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