Financial Equilibrium in the Presence of Technological Change
21 Pages Posted: 30 May 2017
Date Written: May 27, 2017
This article explores the issue of observable instability in financial markets interpreted as a long-term process of adaptation to demand for money, which, in turn, is based on the expected depreciation of fixed assets. Exploration is based on verifying empirically the hypothesis that the velocity of money is significantly, negatively correlated with the pace of technological change. The purpose of exploration is to assess the well-founded of policies, which use financial and monetary tools, rather than the straightforwardly fiscal ones, to stimulate technological change. Empirical research suggests that aggregate depreciation of fixed assets is a significant factor inducing slower a circulation of money.
Keywords: Money, Financial Markets, Technological Change
JEL Classification: E1, E3
Suggested Citation: Suggested Citation