The velocity puzzle revisited: The effects of the housing and stock markets

Maurice D. Levi, Itzhak Venezia*, Yimin Zhang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

This paper re-examines the stability of the income-velocity of money by allowing for the effects of the housing and stock markets. It is shown that much of the hitherto unexplained behavior of velocity can be explained by housing transactions. The importance of housing transactions is shown to be robust to the allowance for stock market transactions and returns, as well as for wealth and expected return effects of housing. The results of the paper suggest that attention be paid to the use of money for the exchange of existing assets, especially real estate.

Original languageEnglish
Pages (from-to)23-32
Number of pages10
JournalJournal of Economics and Business
Volume48
Issue number1
DOIs
StatePublished - 1996
Externally publishedYes

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