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To: Mike M2 who wrote (375)	9/4/2001 10:35:17 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 443

Mike - CB, you said " I realize that Austrians don't believe in velocity" I don't know where you got that impression. Lionel Robbins notes in his "The Great Depression" how monetary velocity slowed and has a chart of it on pg. 19. Velocity slows because people run down cash balances during the boom and seek to rebuild cash balances after the bubble pops. That was interesting about Robbins rejecting Austrian economics later in life. M.N. Rothbard, Man, Economy and State, Vol. II, pg. 735. "...V is an absurd concept...." Regards, Don

To: Mike M2 who wrote (375)	9/4/2001 12:31:49 PM
From: Ilaine	Read Replies (1) \| Respond to of 443

As Don pointed out, I got the idea from him, and he got the idea from Rothbard. But I don't know whether other Austrian economists reject the concept of the velocity of money. The velocity of money is the result of a simple mathematical equation - dividing the total national income by the total money stock. It does tend to rise during expansions and decline during contractions - but then, the national income tends to rise during expansions and decline during contractions, too.