US vs. Canada in Charts: the Velocity of Money
Same in Canada: the money supply dropped sharply in Q1 2009 (velocity = nominal GDP/broad money).
Notice that the velocity in Canada has been on a downward trend spanning 1973-2009, however, the negative slope is falling. I am not too familiar with Canada’s velocity (perhaps some of my readers may be more so), but usually a declining velocity of money is associated with a drop in GDP or inflation. I would have to look into this further, but Canada did experience a term of disinflation from the early 80′s to mid 90′s.
Originally published at News N Economics and reproduced here with the author’s permission.
2 Responses to “US vs. Canada in Charts: the Velocity of Money”
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