Equation of Exchange Presentation

Video: 02. MV = PQ is Economic Fakery

Austrian Economics

After watching the video, you will never use the term “Velocity of Money” ever again!  This will allow you to challenge your professors and peers and ask them some very important questions:

Is MV = PQ a real equation or is it “Economic Fakery?”

If someone says that it is real equation, then after watching the video you can ask them to explain how is GDP = GDP a real equation?  Then ask them how and why are mainstream economists still using this idea as central planning tool?

If they agree that it is not an equation, they will try to defend it by saying that “because they use special assumptions in the equation,” this makes the formula both valid and useful for central planning.  In other words, they must acknowledge that the equation is fake, but once they add fake assumption to the equation it becomes true.

Compare this with the Austrian school of economics which does not use any such tools or beliefs in the absurd.  Note that over 100 years ago Ludwig von Mises showed that the idea of money velocity is not useful, however this has been ignored to the detriment of society.

EC

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