THERMOECONOMICS - Vocat International Ltd

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Copyright: John Bryant, VOCAT International Ltd 2012, for personal use only.
results indicate that elastic relationships of specific price PN and specific
money NP with respect to output volume V have existed in both the UK and
USA economies over much of the periods. Examination of data of M0
money, rather than M4 or M2, yields different relationships between the
variables. However, according to Harrison [Harrison et al Bank of England
(2007)], M0 is now very small and forms only 3% of M4.
Figure 5.6 sets out the short term development of the annualised rates of
change of the variables dV/V, dT/T and dPn/Pn for the two economies.
The initial data was smoothed by calculating annualised 4-quarter moving
averages.
Figure 5.6 Annualised 4-quarter moving average percent change in Output Volume V, Specific
Price PN and Velocity of Circulation T.