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The velocity of money: evidence for the U.K. 1911-1966

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  • Graves, Philip E.

Abstract

This paper presents secular evidence on the income velocity of money balances. Under a variety of specifications and statistical techniques, employed on both traditional and non-traditional variables, the Friedman assertion that money is a superior good is found to lack empirical support. Indeed, income elasticities of demand for M2 balances of .3 to .45 are observed, elasticities much smaller than previously thought.

Suggested Citation

  • Graves, Philip E., 1980. "The velocity of money: evidence for the U.K. 1911-1966," MPRA Paper 19900, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:19900
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    References listed on IDEAS

    as
    1. Graves, Philip E., 1979. "Relative Risk Aversion: Increasing or Decreasing?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 14(2), pages 205-214, June.
    2. Milton Friedman, 1959. "The Demand for Money: Some Theoretical and Empirical Results," NBER Chapters, in: The Demand for Money: Some Theoretical and Empirical Results, pages 1-29, National Bureau of Economic Research, Inc.
    3. Graves, Philip E, 1978. "New Evidence on Income and the Velocity of Money," Economic Inquiry, Western Economic Association International, vol. 16(1), pages 53-68, January.
    4. Graves, Philip E, 1976. "Wealth and Cash Asset Proportions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 8(4), pages 487-496, November.
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    More about this item

    Keywords

    Money demand; velocity of money; income elasticity of money balances;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • A1 - General Economics and Teaching - - General Economics
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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