From: John Conover <john@email.johncon.com>
Subject: Re: Velocity Of Money: What UNITS?
Date: 6 Apr 1999 23:33:24 -0000
Jim Blair writes:
>
> Yes, I encounter so many potentially interesting ideas (especially since the
> internet), that I have time to follow up on only those that seem to have the
> potential to change the way I see things.
>
> This MV = PT = GNP seemed useful when I first encountered it in college econ.
>
> But since I now agree with William Hummel that the "money supply" M is really not
> well defined or controllable with any degree of percision, and V even less so, the
> whole issue looks like some circular tautology: it is "true" but of little
> practical consequence.
>
Hi Jim. I ran the US M1, M2 and M3, data for 20 years from the FED
through a fractal/entropic analysis, (surprise! surprise!) and it
seems like the static vs. dynamic analysis arguments would be in
order, again, (and again, and again.)
It tends to support your conclusion about the money supply being not
well defined or controllable with any degree of precision. (If I
remember correctly, the static and the dynamic solutions varied by a
factor of 2X in a year, having a persistence, or predictability, or
"forecastability," whatever you want to call it, of about 60% based on
the immediate past.)
John
BTW, the analysis is in http://www.johncon.com/ndustrix/archive/fractal.ps.gz,
and the C sources to the programs used in the analysis are in
http://www.johncon.com/ndustrix/archive/fractal.tar.gz. The file fractal.ps is
about a 700 page Postscript(R) document with lots'a graphs and tables
of fractal measurements on all sorts of time series-mostly
economic. If you want to tease you sys admin, you can put it through
the network print spooler 8^).
--
John Conover, john@email.johncon.com, http://www.johncon.com/