[This is quite “ancient”, first published on September 18, 2011, but I believe still has relevance]
The transition from clerical processing to electronic processing increase the transaction's velocity of money
And that banks lend deposits is one of the biggest conspiracy's of the world.
The difference between the Great Inflation and the Great Moderation was the change in velocity.
One resulted in the monetization of time deposits, end of gatekeeping, and the other the impoundment of savings in the banks.
Why N-gDp targeting works is that N-gDp is a proxy figure for all economic transactions in Professor Irving Fishers truistic "equation of exchange".
Inflation cannot occur unless fueled by a chronic increase in the volume and/or velocity of money
The transition from clerical processing to electronic processing increase the transaction's velocity of money
And that banks lend deposits is one of the biggest conspiracy's of the world.
The difference between the Great Inflation and the Great Moderation was the change in velocity.
One resulted in the monetization of time deposits, end of gatekeeping, and the other the impoundment of savings in the banks.
Why N-gDp targeting works is that N-gDp is a proxy figure for all economic transactions in Professor Irving Fishers truistic "equation of exchange".
Inflation cannot occur unless fueled by a chronic increase in the volume and/or velocity of money