2005/03/03 by Yougui Wang, Hanqing Qiu · 6 citations
Economics, Econometrics and Finance · Mathematics · Physics and Astronomy · #Combinatorics #Complex Systems and Time Series Analysis #Computer science #Econometrics #Economic Theory and Policy #Economic theories and models #Economics #Endogenous money #Expression (computer science) #Finance #Interval (graph theory) #Mathematical economics #Mathematics #Monetary economics #Monetary policy #Present value #Reciprocal #Statistics #Time value of money #Value (mathematics) #Velocity of money #cond-mat.stat-mech #physics.soc-ph #q-fin.GN
paper · pdf · doi:10.1016/j.physa.2005.01.053
published in Physica A Statistical Mechanics and its Applications 353, 493-500 (Elsevier BV) · 10 pages
openalex publication_date 2005/03/03 · arxiv created 2005/07/21 · arxiv updated 2009/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
The determinants of the velocity of money have been examined based on life-cycle hypothesis. The velocity of money can be expressed by reciprocal of the average value of holding time which is defined as interval between participating exchanges for one unit of money. This expression indicates that the velocity is governed by behavior patterns of economic agents and open a way to constructing micro-foundation of it. It is found that time pattern of income and expense for a representative individual can be obtained from a simple version of life-cycle model, and average holding time of money resulted from the individual's optimal choice depends on the expected length of relevant planning periods.