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SQ4Is Income Velocity Constant

SQ4Is Income Velocity Constant - .1 Velocity of M1 and M2...

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Unformatted text preview: .1 Velocity of M1 and M2, 1959—2005 M1 velocity is nominal GDP divided by M1, and M2 velocity is nominal GDP divided by M2. M1 velocity moved steadily upward until about 1981, but in the early 19805 M1 velocity fell and it has behaved erratically since then. M2 velocity has no clear trend and is more stable than M1 velocity, but it has been unpre- dictable over some short periods. Source: FRED database of the Federal Reserve Bank of St. Louis, series M1 SL, MZSL, and GDP. Velocity M1 VELOCITY 5.0 4.0 3.0 2.0 «.2, ....... f... 1.0 M2 VELOCITY 0.0 1959 1999 2003 2005 Year 1963 1967 1971 1975 1979 1983 1987 1991 1995 ...
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