Here's something that has long bugged me...
When money is passed from man A to man B in exchange for some goods then the money can be spent by man B or loaned out by B's bank or invested by B's bank after the exchange has taken place. No doubt B's bank will do something with the money almost immediately. I say almost immediately, but I have no idea whether that its likely to be within 1 millisecond, a second, and hour, a day?
So my questions are: what is the average time that money is unable to be used during a transaction? And does it matter? If the typical time now was 0.2 seconds and some change (regulatory/cultural/technical or otherwise) caused that time to decrease to 0.1 seconds, would that make any noticeable difference to the greater economy? Has anyone made a study of this?
What Went Wrong with Economics
In high-frequency trading things are bought and only held for under a thousandth of a second before it is sold once more. This allows financial markets to respond to shocks much more quickly.