Abstract:
The purpose of this paper is to describe and interpret some empirical
regularities in the movements of money's income velocity of circulation in
major industrial countries. The results offer support for the "portfolio view",
especially in the case of Germany. Since 1976, increases in the opportunity
cost and the risk associated with holding dollars have argued strongly in
favour of a shift in currency demand towards the Deutsche Mark.
The views expressed in this publication are those of the authors and do not necessarily reflect the views of the BIS or its member central banks.