Using the Fisher Equation it can seen how this works.

Between January 2008 and December 2013 the volume of M2 increased by 48% and velocity decreased by 18% and the product of M2*V2 increased 23%. The size of the Real Gross Domestic Product increased 9% and the CPI (a surrogate for the prices of goods and services) increased 11% and the product of GDP and CPI increased 11% (since CPI is not actual prices but a surrogate for it, there is not an actual equality). So [delta]M2*V2 = [delta]P*y.

M2 - 2008 = 7.45 T USD , M2 - 2013 = 11.02 T USD **Ratio 2008/2013 M2= 1.48**

V2 - 2008 = 1.89 , V2 - 2013 = 1.57 **Ratio of 2008/2013 V2 = 0.82**

M2*V2 - 2008 = 14.07 T USD , M2*V2 - 2013 =17.03 T USD **Ratio of 2008/2013 M2*V2= 1.23**

June 5, 2014 · by jgeorgiou · in articles · Edit

Using the Fisher Equation it can seen how this works.

Between January 2008 and December 2013 the volume of M2 increased by 48% and velocity decreased by 18% and the product of M2*V2 increased 23%. The size of the Real Gross Domestic Product increased 9% and the CPI (a surrogate for the prices of goods and services) increased 11% and the product of GDP and CPI increased 11% (since CPI is not actual prices but a surrogate for it, there is not an actual equality). So [delta]M2*V2 = [delta]P*y.

M2 - 2008 = 7.45 T USD , M2 - 2013 = 11.02 T USD **Ratio 2008/2013 M2= 1.48**

V2 - 2008 = 1.89 , V2 - 2013 = 1.57 **Ratio of 2008/2013 V2 = 0.82**

M2*V2 - 2008 = 14.07 T USD , M2*V2 - 2013 =17.03 T USD **Ratio of 2008/2013 M2*V2= 1.23**

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