The Money Supply Is Not Part of GDP

The money supply is not linked to GDP. You have to split money into money going into GDP for the real circulation and money going into asset transactions, which I do in my disaggregated quantity theory. But asset transactions are not part of GDP. They don't teach national income accounting anymore. It used to get that as sort of economics one-on-one, but they don't teach it anymore. So what happened then, particularly, there was this big bout in the 80s, is that in many countries, money supply was rising. And so your standard traditional models would give you the illusion of a velocity decline. That meant that the policy makers didn't really know what to do