Over the last century, the velocity of money—the rate at which money changes hands through the economy—has declined. Today, money moves at one of the slowest rates on record, meaning every dollar today generates 70% less economic activity than a dollar did just ten years ago. That has big implications for our economy. Political economist Ann Pettifor joins Nick and Goldy to explain how the velocity of money is related to money creation, and why taxing the rich is ultimately pro-growth (it’s all related, we promise!). 

Ann Pettifor is a political economist, author, and public speaker, and the Director of PRIME (Policy Research in Macroeconomics). Her work focuses on the global financial system, sovereign debt restructuring, international finance, and sustainable development. She is the author of many books, including The Production of Money and The Case for the Green New Deal. 

Twitter: @AnnPettifor

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Further reading: 

Want to expand the economy? Tax the rich! 

https://prospect.org/power/want-expand-economy-tax-rich/ 

A world awash in money: https://media.bain.com/Images/BAIN_REPORT_A_world_awash_in_money.pdf

What does money velocity tell us about low inflation in the U.S.? https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us 

Vultures are circling our fragile economy… https://www.annpettifor.com/2020/06/vultures-are-circling-our-fragile-economy/ 

Decades of empirical research finds no inverse correlation between top tax rates and growth: 

• https://archive.org/stream/R42111TaxRatesandEconomicGrowth-crs/R42111%20Tax%20Rates%20and%20Economic%20Growth_djvu.txt

• https://www.brookings.edu/wp-content/uploads/2016/06/09_Effects_Income_Tax_Changes_Economic_Growth_Gale_Samwick.pdf

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