Looking at my recent Unspeakable Practices, Unnatural Rates...
Recalling my older post on Frank Shostak on Velocity. From that post:
"Velocity Does Not Have an Independent Existence," Shostak says:
...velocity does not have a "life of its own." It is not an independent entity--it is always [one number] divided into [another number]..."
I think I know what Shostak was complaining about.
You take two economic measurements -- GDP and the quantity of money, or inflation and unemployment -- divide one by the other, and then treat the result as though it has a life of its own. It really doesn't.
I must say, though, that if GDP increases and the quantity of money does not, then people must be spending faster. There's no other way those things could happen.
It's not the same with the unnatural rate, the natural rate of unemployment. If unemployment falls while inflation fails to rise, there must be reasons for this. You can't just look at the ratio and say, "Well, that explains it."
The velocity of money is something you can feel: slow when you're standing on the unemployment line, fast when you go to the Fair. Used to be anyway, fast at the Fair.
Unemployment? Yeah, you can feel unemployment. But you cannot feel the natural rate of unemployment. That is just a story somebody made up.