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To: Mike M2 who wrote (379)	9/4/2001 2:42:57 PM
From: Don Lloyd	Respond to of 443

Mike - Dr. Richebacher has discussed velocity and how it slows during the bust in his letters so I am surprised by Rothbard's remarks. I guess the Austrians need to compare notes. Velocity appears in Irving Fisher's equation of exchange, MV=PT, which Rothbard also comprehensively destroys. The issue is not whether you can calculate a velocity of money, nor whether it varies with the economy, but whether it has any value in either explaining or predicting anything. I can define an economic circular area by multiplying pi by the square of GDP, and it will track the economy, but it's merely a useless mathematical artifact. Regards, Don