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Why does a decrease in interest rate reduces the velocity of money circulation?

Seems to me the relationship is inverse. If interest rates went to, say, 20%, I'd be buying a lot less stuff and putting more into savings. Further, economic investment projects of all types would be ...
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Japan: Will the quantity of money per unit of output and the consumer price index show a huge divergence in the decades after 1980?

Will the same chart plotted in the decades after 1980 show a huge divergence between the quantity of money per unit of output and the consumer price index? ["huge" here means that the ...
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1 vote

Does money need to fulfill all three functions (store of value, medium of exchange and unit of account) to be considered money?

According to general literature, yes it should satisfy all three. For example, some papers question whether bitcoin is money because of being poor medium of exchange such as Yermack (2015). In ...
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2 votes

Why did money stop being backed by precious metals?

Why did money stop being backed by precious metals? Ultimately people realized that it is waste of scarce resources to dig up gold/silver from the ground just to put it under the ground again (in a ...
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