Huseyin,

Friedman argued that velocity is stable because consumption depends 
upon permanent income rather than current income. Marginal 
propensities to consume and save and speculative demand for merely 
holding money indicate that money demand is variable and sensitive to 
cyclical fluctuations. Permanent income theory indicates that people 
ignore transitory changes in income- hence the MPC has no stable 
value and money demand will stay more or less in line with long term 
consumption plans, which are based on expected lifetime income and 
insulated from cycles through rational long term financial 
management. Since velocity is the inverse of money demand, stable 
money demand implies stable velocity. This does not imply that 
velocity is literally constant, but rather that it changes more due 
to financial innovation (i.e. ATM machines) than with general 
economic conditions.

Part of the confusion over Friedman's views stem from the fact that 
he did not spell out all of the connections between velocity, money 
demand, permanent and transitory income, multipliers and such in one 
place. His work on the quantity theory and permanent income are often 
seen as separate contributions. There is an oral tradition that 
spells these connections out: Friedman taught his students (i.e. 
George Maesich) who taught their students (i.e Steve Cunningham) who 
taught their students (i.e. Doug MacKenzie)...

Doug Mackenzie