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Bradley, 
 
I do not know what Friedman's response has been to the end of the stability 
of the velocity of money during the last 2 decades with regard to his 
policy suggestion, but it seems that Friedman would not agree with the 
stated 2 decades. In his (short) response to De Long's article 
(Correspondence in JEP, Vol. 14(4), Fall 2000) Friedman claims that the 
"break in the relevant monetary velocities does not occur in the 1980 as 
that chart [Figure 1 in De Long's article] would seem to suggest, but in 
the early 1990s." Particularly, he argues that it is true that in the 1980s 
the removal of the prohibition of interest payments on demand deposits 
lowered M1 velocity drastically, but that this had no effect on the broader 
aggregates M2 and M3. 
 
Thomas Moser 
 
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