Velocity of Money and Productivity Growth: Explaining the 2% Inflation Target in the U.S. (1959–2007)
This article provides a macro-foundation for why the specific value of 2% is a valid inflation target. The approach postulates that innovations generate transactional cost savings by comparison to barter. The optimal velocity of money is derived as a function of productivity growth and of long-term...
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| Format: | Article |
| Language: | English |
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MDPI AG
2024-02-01
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| Series: | International Journal of Financial Studies |
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| Online Access: | https://www.mdpi.com/2227-7072/12/1/15 |