ABSTRACT
Most monetary reform proposals are concerned with the physical volume of means of payment available for production or consumption. There is one school, however, which takes relatively little interest in the actual quantity of currency and credit, and concentrates instead upon their velocity of circulation. By velocity of circulation we mean the number of times a given amount of currency or credit changes hands in a given period of time. It is evident that the same amount of currency and credit can do more work if it is turned over more frequently. An increase in the velocity of circulation of money tends, therefore, to produce the same effect as an increase in its quantity. A given volume whose velocity is increased can finance a larger amount of production and consumption. At the same time, compared with an increase in the physical volume of money, it has the advantage that it does not tend to undermine confidence. It is no wonder, then, that many monetary reformers have turned towards this method of expansionism.
