Everyone should already be familiar with the negative-interest
currency of Worgl, Austria, and the known effects of demurrage.
Effects such as being an intrinsically loose money policy
(forcing government to rely on fiscal policy and work
restrictions to prevent asset inflation, as it should!),
realigning the discount rate towards a socioeconomic level and a
future-orientation, decoupling currency interest rates from
asset interest rates, and allowing the limited production of
free money (free of inflation and debt). This post addresses
lesser-known effects of increasing the velocity of money.
Inflation is the product of the quantity of money X its velocity
exceeding the value of the goods and services in the economy.
Theoretically, if you increase the velocity of money you need to
decrease its quantity to get the same inflation. However,
inflation is only one measure of the health of the economy.
Unemployment is another. As it happens, unemployment is not
affected by the quantity of money changing hands as m