M1 Money Multiplier

[Anonymous]

http://research.stlouisfed.org/fred2/series/MULT?cid=25
under 1.
the average dollar only cycles through the economy once. is there a dynamic here that i’m missing or is this as bad as it looks? i would think that this kind of trumps a contracting credit spread…

 

[Dreary]

It sounds like it is same as money velocity, which tends to go down when economic activity slows down.

 

[comp_sci_kid]

all i remember is MV = PQ