Could someone please remind little EJ Antoni that GDP/M2 aka velocity is not constant? Check out his Twitter to see why I ask. And please tell Koptis that it is not mean reverting around 1.2.
Not constant and not mean-reverting. Also, there was this Great Moderation episode, which was characterized by a huge change in the relationship between velocity and both growth and inflation:
Since the Moderation, velocity and growth-and-inflation seem to vary together mostly during recessions and immediately after, but not during expansions. Maybe some third factor – spending, perhaps – is driving the whole thing?
I haven’t checked little Antoni’s twitface account. I just can’t – life is bad enough without chasing stupid.
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