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# Quantity theory of money challenge

Wed 26 Apr, 2017 02:37 pm
Given the following variables in data:

GDP per capita (USD); GDP Index (2012 = 100); Economic growth rate (%GDP); Consumption (% increase); Investment ( % change); Unemployment Rate; Government surplus (% of GDP); Public Savings (% of GDP); Money supply (annual increase in %); Inflation Rate (CPI, % change); Central Bank Interest Rate (%); Stock Market index (% change); Net Exports (% of GDP); National Debt (% of GDP)

How to calculate change in V from the formula VM = P * Y? Is this even possible? If so, how would we do that?
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AngleWyrm

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Mon 30 Oct, 2017 08:44 am
@John123491,
The wikipedia article states in part that the Cambridge equation is equivalent to the equation of exchange with a velocity of 1/k where k represents the portion of income not used in transactions.

If M = kPQ then k=M/(PQ), the inverse of velocity V = (PQ)/M

Price x Quantity is total sales, which in a closed system is also total income.
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