Low velocity can result from lots of factors, including what you describe. What I’m asking about though is: am I correct that Austrians don’t use this concept in discussions of monetary policy, and if not, how do they address it?
Discussion
You're right they don't. Because they don't believe in dictating monetary policy.
If people don't spend Because they don't want to, no artificial economic stimulus will create sustain economic growth and fix the actual problem.
I agree with not dictating monetary policy. But velocity of money would still be useful in analysis of the economy, e.g. “despite the fact that the money supply itself did not increase, we experienced an increase in velocity of money due to introduction of faster payment settlement technologies which resulted in an increase in the average price level.”
Not at all saying that statement is accurate, just saying velocity could be used as a tool of analysis.
I would refer back to this note.
I don't see what else could be analized.
Sure, if there is less barrier to commerce with easier money to use then I would generaly say it's good. But again we're really just saying it's good when more people fulfills each others needs.
What more would you expect from knowing that people are spending more or less?
The example I gave would be one. We like to understand what changes will lead to which outcomes. There’s value in understanding that a change in payment technology or consumer behavior may result in an increase in average prices, for example. It helps us make intelligent business planning decisions, as well as providing useful models for understanding history. That can be vital in shooting down BS monetary theory from the Keynesian side.
To make sure I’m being clear, I’m not disagreeing with your statements overall. I’m simply trying to understand if I’m correct that Austrian economics generally doesn’t use this paradigm and, if that’s the case, how they would explain changes in the economy that a Keynesian would attribute to velocity of money.
It's not that they wouldn't use the concept at all. It's that they wouldn't give it a causal status.
"How would they explain changes in the economy that à keynesian would attribute to velocity"
The wouldn't attribute changes in the economy to the Velocity of money. They might use it to see a change but it stops there. It's different to say that the Velocity caused à change rather than it beign a reflection a change.
I don't think any austrian would disagree with the Statement that faster paiements made for a higher Velocity of money. There's just not much to extrapolate from there. The higher number of transactions is à is caused by a réduction of friction between economic actors.
Any austrian would say that a réduction in friction between econonomic actors (faster payments) is most likely to grow the amount of transactions.
Saying that it would drive prices up or down is not necessarily true. Tho I would say it is very likely to reduce prices as it may open businesses to bigger markets and therefore more profits and therefore more growth and therefore more economies of scale.
But again, the Velocity of money is not the part where the big analizes are made other than acknowledging their is more transactions than yesterday.