TransWikia.com

Price level calculation

Economics Asked on July 18, 2021

I am currently reading Dying of Money by Jens O. Parsson and he criticizes the way price level is calculated. Basically he tries to make a case that since money are not only used to purchase goods but also used for investing, there are two money supplies and two velocities at the same time:

There are at all times two distinct money supplies and two distinct
velocities of money, one each in the market for national product and
the market for national wealth ["investments"]. The comparison between
the total supply of money and the gross national product alone, as is
made in computing the so-called "income velocity" of money, is
meaningless.

First, I wonder what does he mean by two distinct money supplies? Where does the second supply come from? Is it like borrowed money?

Second, is there a velocity metric for investments or maybe even inflation metric too?

Add your own answers!

Ask a Question

Get help from others!

© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP