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The cash conundrum: There’s more money around, but it changes hands less often – Sydney Morning Herald

Since the 1980s, the supply of money has been increasing but its velocity has decreased, resulting in less productive investment and a dramatic increase in financial…

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The period after the global financial crisis has been marked by a dramatic increase in central bank balance sheets as they poured liquidity into their financial systems. Their response to the pandemic has been even more aggressive.
Yet while the volume of money circulating within the financial system has increased, its velocity seems to have decreased.
The velocity of money is the frequency with which a unit of currency is used to produce goods and services within a given period of time. In the…

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