why is the velocity of money so low 
the velocity of money in the united states fell sharply during the first and second quarters of 2020 as calculated by the st louis federal reserve bank while there is no definitive explanation the fall is likely due to the diminished activity incurred during the covid 19 pandemic as well as an increase in consumer savings due to economic uncertainty the bottom linethe velocity of money represents the heartbeat of an economy it measures how quickly money changes hands from one transaction to another during times of prosperity the velocity of money tends to be high indicating bustling activity and frequent transactions during an economic downturn the velocity slows indicating that consumers are less willing to spend money or make transactions 