Peripheral speed (money)

peripheral speed of the money is the frequency, with which the same money supply is used on the average within a yearly for purchase. The money circulation speed is differently high depending upon kind of money used. For example view assets are used about twice as frequently for payments like cash,with increasing tendency.

As universal article of exchange money among the restaurant participants of its currency area must frequented. So that a national economy functions troublefree, the peripheral speed of the money must be as constant as possible. It is substantial for the general price level. An increase of the peripheral speed works just like an increase thatMoney supply increasing on the price level (inflationary), a decrease of the peripheral speed just like a reduction of the money supply price level-lowering (deflation acre). See also circulation of the money.

Deepened definition: By the peripheral speed of the money one understands the relationship of the overall economic sum of all in Material transactions (purchases) evaluated money or an overall economic income size to the overall economic cash on hand. Today one mostly regards a form of the income peripheral speed, with which an overall economic income size - like in particular the gross national product - is referred to the cash on hand. Since there are different concepts of the overall economic money supply,differ the different forms of the peripheral speed also after the used measure for the money supply.

With Y as abbreviation for the nominal gross national product, with M1, M2 and M3 to the different kinds to the assigned peripheral speeds applies for the money supply and with V1, V2 and V3in particular:

disputed is the question, which long-term trend shows the income peripheral speed of the money. The answer of this question depends among other things on the selected money supply concept. In many developed national economies V3 shows today onefalling trend, for individual nations (e.g. Great Britain) gave it however in former times to periods of long-term stability. For V2 for a set of OECD - a on a long-term basis u-shaped process was proven to countries. V1 partly shows a rising trend.

See also:


  > German to English > (Machine translated into English)